Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Online resale ticket exchange, marketing partners settle FTC “venue-mimicking” claims, (Jul 24, 2014)

By Jeffrey May, J.D.

A Connecticut company behind the online resale ticket exchange TicketNetwork.com and two of the company's marketing partners have agreed to settle FTC and State of Connecticut charges that they deceived consumers into thinking they were buying event tickets from original venues at face value. Under the terms of separate settlements, TicketNetwork, Inc., Ryadd, Inc., and SecureBoxOffice, LLC have agreed to refrain from deceptively advertising their resale ticket services and to pay $1.4 million into a Connecticut fund for consumer education and enforcement (FTC v. TicketNetwork, Inc., FTC File Nos: 132 3203, 132 3204, 132 3207; Civil Action No. 3:14-cv-1046).

TicketNetwork operates an electronic exchange enabling ticket brokers and other ticket-holders to resell their tickets to consumers on the secondary market. The company says that its site provides a forum for the exchange of more than 7.5 million event tickets every day.

According to the complaint filed jointly by the FTC and State of Connecticut, TicketNetwork, Ryadd, and SecureBoxOffice violated the FTC Act and the Connecticut Unfair Trade Practices Act by misrepresenting that they were the “official” site or “box office” for the actual venue where an event was being held. It was alleged that TicketNetwork knowingly profited from the deceptive venue-mimicking tactics of Ryadd and SecureBoxOffice.

The complaint details how consumers might have been confused into thinking that they were on the “official” website for a venue, such as Radio City Music Hall, despite disclaimers on the site. The “fine print disclaimers” stating that the site was “not affiliated with any primary website, venue, or box office” were insufficient to dispel the impression that a consumer was on the venue's official website, it was alleged.

Under the terms of proposed consent decrees with TicketNetwork, as well as Ryadd and SecureBoxOffice and related individuals, all of the defendants would be prohibited from misrepresenting that a resale ticket site is a venue site or is offering tickets at face value and barred from using the word “official” in any ad, URL, website, or other advertising for resale tickets, except in very narrow circumstances. In addition, the defendants would be required to affirmatively disclose that: their websites are resale marketplaces and not venues or box offices; the ticket price may exceed the ticket’s face value; and the website is not owned by the venue, sports team, performer, or promoter. Further, TicketNetwork would be required to have all partners sign written contracts promising to adhere to the order, and to take disciplinary action when partners violate the order and appropriately handle consumer complaints about venue confusion. The settlements also would require Ticket Network to pay $750,000 to the State of Connecticut, Ryadd to pay $550,000 to the state, and SecureBoxOffice to pay $100,000 to the state.

Companies: Ryadd, Inc.; SecureBoxOffice, LLC; TicketNetwork, Inc.

News: ConsumerProtection StateUnfairTradePractices ConnecticutNews FederalTradeCommissionNews