Examining the Better Online Ticket Sales Act of 2016

September 13, 2016

This hearing of the Consumer Protection, Product Safety, Insurance, and Data Security Subcommittee is now called to order.

Whether it’s a Garth Brooks concert in Wichita, a KU Basketball game in Lawrence, or the most hyped and prestigious Broadway show of all time – Hamilton – the digital age has made acquiring tickets easier than ever. But an age-old issue, ticket scalping, has been made even more prevalent by advances in technology. When you’re trying to pick up tickets for the next big event, you’re no longer only competing against other eager fans when the tickets are released. You are now forced to compete against an army of sophisticated “ticket bots” that overwhelm the ticketing website through brute force, scoop up as many tickets as possible, and then resell them on the secondary market at a significant markup.

So, what are ticket bots? Here’s a quick example – a live performance is happening – say a Garth Brooks concert in Wichita. You know lots of people who want to be there, and there are only so many tickets available.

People who use bots first overwhelm the primary ticket issuer’s website by “cutting the line” ahead of regular fans. While those tickets are taken out of circulation, they quickly use a human operator to enter distinct names, credit cards and addresses, and circumvent other security measures.

The software is easy to find, and you don’t even have to be a technological genius to use it. I don’t want to direct anyone to the website, but a quick google search for “ticket bots” will lead you to a different kind of marketplace – one where you can purchase the software we’re talking about today.

The bots are advertised as specific applications for websites such as Ticketmaster or StubHub, and they even offer to make custom products.

Bots harm everyone in the live entertainment ecosystem – from performers to fans. Ticket issuers, like Ticketfly, have to invest heavily in server capacity and extra security measures to deal with the artificially-generated stress that the bots produce. And when the site doesn’t seem to work properly, or the event is listed as sold out seconds after tickets go on sale – consumers get frustrated with the ticket issuer or the venue.

The secondary market is also impacted by this practice. For their part, eBay/StubHub supports BOTS legislation and believes that misuse of ticket bots “harm all parts of the ticket industry.”

And of course, the biggest impact is on the fans. A report by the New York Attorney General suggests that “at least tens of thousands of tickets per year are being acquired” using ticket bots.

To be clear, I believe a vibrant secondary ticketing marketplace is nothing but good for consumers. People can and should be able to sell their tickets in the marketplace, and if people are willing to pay extra for certain performances, that is their right. StubHub estimates that half the tickets sold on their platform are below face value – so the value prospect cuts both ways for consumers.

What I take issue with, and what this legislation seeks to address, is the practice of “cutting the line” when tickets are offered, so that regular consumers don’t even have a chance to pay face value for the tickets.

Some have also raised ticketing concerns outside the scope of the BOTS Act. We do not claim that this legislation will be the silver bullet for all that ails consumers, and I look forward to a robust discussion today about many of those proposals.

Many groups, including StubHub in their testimony today, have advocated for additional provisions that they believe would be beneficial to consumers. But our legislation has been narrowly tailored to address a real and significant problem that impacts peoples’ lives, and there is strong bipartisan and bicameral interest in the bill.

It is my expectation that this committee will consider the BOTS Act at its next markup, and I would encourage all of my colleagues to cosponsor and support this bipartisan legislation.

I would like to specifically thank my Commerce colleagues for their interest and support in this issue. Ranking Member Blumenthal, thank you for your support in advancing this legislation and in putting together this hearing. Senator Fischer, thank you for your support as well, and I’m sorry that the Big 12 has trumped the Big 10 once again, and is testifying here today.

Yesterday the House of Representatives passed on suspension a very similar version of the BOTS Act. I’d like to thank Congresswoman Blackburn for her work on this issue, and I look forward to continuing to work with her to make this bill a law.

I would now like to recognize the Subcommittee’s Ranking Member, Senator Blumenthal, for five minutes to deliver his opening statement.