FROM SEATS TO SCAMS: UNMASKING THE HIGH-STAKES WORLD OF TICKET SCALPING


Author: Jaisri Y R, Saveetha School of Law


To the Point


Ticket scalping refers to the practice of purchasing tickets at face value and reselling them at significantly higher prices. The manipulation of the ticketing process, often involving bots or strategic withholding of tickets, leads to artificial scarcity and inflated demand, allowing scalpers to profit at the expense of genuine consumers. This unethical practice not only violates consumer rights but also disrupts fair market competition. Legal measures in India are insufficient to address modern scalping techniques, particularly those involving online platforms and automated systems.Legal Jargons
Ticket scalping violates several consumer protection and competition laws. The Consumer Protection Act, 2019 in India addresses unfair trade practices, including deceptive advertising, false claims, and price manipulation. The Competition Act, 2002 prohibits anti-competitive behavior such as price-fixing and resale price maintenance.


Ticket Scalping: Ticket scalping refers to the illegal or unethical practice of purchasing tickets at face value and reselling them at significantly inflated prices. This often involves the use of automated bots or systems to buy large quantities of tickets in bulk, creating artificial scarcity, and driving up the demand and prices for tickets.
Consumer Protection Act, 2019: This is an Indian law enacted to safeguard the rights of consumers. It provides a framework for the protection of consumers from unfair trade practices, substandard goods, and services, and ensures transparency in consumer transactions. The Act includes provisions for seeking redressal for grievances through consumer forums and other legal avenues.


Competition Act, 2002: The Competition Act, 2002 is a key piece of legislation in India designed to promote and maintain fair competition in the market. It prohibits practices that have the potential to restrict competition, such as price-fixing, cartels, and abuse of dominant market positions. The Act aims to prevent anti-competitive behavior and foster market efficiency.


Indian Penal Code (IPC): The Indian Penal Code (IPC) is the principal criminal code of India, outlining various offenses and their corresponding punishments. It covers a wide range of crimes, including fraud, theft, breach of trust, and cheating. The IPC is an important legal framework for prosecuting criminal offenses in India.


Automated Systems (Bots): Automated systems, or “bots,” are software applications designed to perform tasks autonomously. In the context of ticket scalping, bots are used to rapidly purchase large quantities of tickets, bypassing security measures and obtaining tickets faster than human buyers, often to resell them at inflated prices.


The Proof: Exposing the Scalping Syndicate
Scalping often involves the use of bots and automated systems that purchase large quantities of tickets, which are then resold at inflated prices. This issue has grown more complex as event organizers themselves are often complicit in these practices, either through direct involvement or by turning a blind eye to resellers. In India, the lack of clear legislation surrounding ticket scalping has allowed the practice to thrive. Internationally, platforms like Ticketmaster have faced legal challenges related to scalping, with the use of bots being a significant concern.

Abstract


Ticket scalping has evolved into a pervasive issue in the entertainment industry, with resellers, event organizers, and automated bots manipulating the ticketing system to inflate prices, thereby depriving consumers of fair access. This practice not only undermines consumer rights but raises serious legal and ethical questions. The deliberate hoarding, artificial scarcity, and use of bots in ticket sales have prompted legal scrutiny and calls for reform. This article critically analyzes the legal implications of ticket scalping in India and internationally, examining relevant case laws and legislative gaps, with a focus on the Consumer Protection Act, 2019, Competition Law, and Criminal Law.

The Call for Regulatory Reform


To combat the growing issue of ticket scalping, India must consider introducing more specific legislation that addresses online scalping, the use of bots, and the unethical practices of event organizers and resellers. The existing Consumer Protection Act, 2019 and Competition Act, 2002 provide some protection, but more targeted reforms are necessary. International legislation, such as the BOTS Act in the United States and the Ontario Ticket Sales Act in Canada, offers valuable models for India to follow.

Case laws


Diljit Dosanjh Dil-Luminati Tour Ticketing Case
A law student filed a legal notice against the event organizers, accusing them of malpractice. The claim was that ticket sales began earlier than advertised, causing tickets to sell out instantly. The student argued that this sudden surge in sales was indicative of an artificially created scarcity, a violation of consumer rights under the Consumer Protection Act, 2019.


BookMyShow and Coldplay Concert Incident
Allegations arose regarding the Coldplay concert tickets, which were sold through BookMyShow. Consumers reported being locked out of the platform due to bot usage, while tickets that sold out quickly appeared on secondary platforms like Viagogo at exorbitant prices. This prompted legal action under the Indian Penal Code for criminal breach of trust and cheating, with accusations of collusion between event organizers and resellers.
Ticketmaster LLC v. Prestige Entertainment (US)
The Ticketmaster LLC case involved the use of bots to purchase large quantities of tickets. This resulted in a lawsuit under the Computer Fraud and Abuse Act, leading to the introduction of the BOTS Act, which specifically made it illegal to use bots for purchasing tickets. The case set a crucial precedent for future legislation targeting automated scalping.


Eventim UK Ltd v. Vivendi Universal SA (UK)
In this case, Eventim UK sued Vivendi Universal for breaching contractual terms by allowing unauthorized resale of tickets. The case highlighted the need for enforcing contractual agreements against secondary market sales, emphasizing the importance of regulating ticket resale platforms.


Ontario Ticket Sales Act (Canada)
This legislation, introduced in 2017, was aimed at curbing ticket scalping. It prohibits the use of bots for ticket purchasing and caps resale prices at 50% above the original value. This model offers a robust legal framework and has been an essential step toward controlling scalping practices.


Watson v. Viagogo (UK)
The Watson v. Viagogo case, initiated by the Competition and Markets Authority (CMA), resulted in reforms requiring transparency in secondary ticket listings. The case underscored the obligation of resellers to provide accurate information, including ticket prices, seat locations, and any associated restrictions.

Conclusion


Ticket scalping has become a significant issue in both India and internationally. The manipulation of ticket sales through automated systems and collusion between event organizers and resellers deprives consumers of fair access and inflates ticket prices unfairly. Legal frameworks such as the Consumer Protection Act, 2019 and Competition Act, 2002provide some degree of protection, but there is an urgent need for more specific laws targeting modern scalping practices, especially those involving online platforms and automated systems. India must act swiftly to close the regulatory gaps, ensuring fair access to tickets and protecting consumer rights.

FAQS


Q1: Is ticket scalping illegal?
Ticket scalping itself is not inherently illegal, but the practice becomes illegal when it involves unfair trade practices, such as price manipulation, use of bots, or collusion with organizers. In some jurisdictions, laws such as the BOTS Act and the Ontario Ticket Sales Act prohibit automated purchasing and set price caps on resold tickets.


Q2: What laws are violated in ticket scalping?
Ticket scalping can violate several legal provisions, including:
Consumer Protection Act, 2019 for unfair trade practices.
Competition Act, 2002 for anti-competitive behavior, such as price fixing and resale price maintenance.
Indian Penal Code (IPC) for criminal breach of trust and cheating in cases involving intentional manipulation of ticket sales.
Consumer Rights Act 2015 in the UK, which mandates transparency in secondary ticket sales.


Q3: How can authorities tackle ticket scalping in India?
To address ticket scalping, India needs to amend existing laws to include provisions specifically targeting online scalping practices, such as the use of bots and price manipulation. Additionally, there should be clearer regulations for event organizers and platforms to ensure fair access for consumers.


Q4: Are there international precedents for addressing ticket scalping?
Yes, several countries have enacted laws to curb ticket scalping, such as the BOTS Act in the United States, which makes it illegal to use automated systems to purchase tickets, and the Ontario Ticket Sales Act in Canada, which caps resale prices and bans bot usage.


Q5: Can event organizers be held accountable for ticket scalping?
Yes, event organizers can be held accountable if they engage in practices such as hoarding tickets, using bots, or collaborating with resellers to inflate prices. Legal cases and consumer complaints suggest that organizers who manipulate ticket sales can face legal action under consumer protection and competition laws.


Q6: What can consumers do if they are affected by ticket scalping?
Consumers who are affected by ticket scalping can file complaints under the Consumer Protection Act, 2019, claiming they were subjected to unfair trade practices. Additionally, they may seek redress through consumer forums or the relevant regulatory bodies.

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