FTC fines ticket scalpers who used bots to buy and resell tickets
The fines are the first to be issued under anti-bot legislation in the US
The Federal Trade Commission (FTC) has fined three ticket brokers for using automated software to scalp thousands of tickets from Ticketmaster. It’s the first such settlement bought under anti-bot legislation in the US.
In the settlements, the FTC claimed that Cartisim Corp, Just in Time Tickets, and Concert Specials used bot software to automatically scrape and reserve tickets on event websites. Between them, these companies purchased over 150,000 tickets for various events and resold them, taking in millions of dollars in revenues.
Since January 2017, the organizations have used IP proxies to access Ticketmaster and fake accounts and credit cards to buy more tickets than they were allowed, say the settlements. They also used CAPTCHA-bypass services and fictitious names and addresses.
According to the FTC settlement documents, the company that made the most money from ticket bots was Concert Specials, run by Steven Ebrani. It made over $13.7 million in revenues selling over 82,000 tickets it scalped via approximately 35,500 Ticketmaster transactions.
Cartism, operated by Simon Ebrani, purchased almost 25,000 tickets in just over 9,000 separate transactions and earned over $3.8m in revenues scalping them. Just In Time Tickets, operated by Evan Kohanian, made over $8.6 million by automatically buying and scalping over 48,000 tickets through over 14,000 Ticketmaster transactions.
These three companies used ticket bot programs called Tixman, Tixdrop, and Automatick (also known as Smartick) to automatically search for and reserved tickets fitting their search criteria, blocking others from purchasing them.
All three defendants had previously signed agreements with the New York Attorney General agreeing not to use ticket bot software.
The FTC levied $31.6 million in fines against the three companies. Concert Specials got the highest fine of $16 million, and Just In Time Tickets received the next largest fine at $11 million Cartism Corp got dinged with a $4.4 million fine. Because of their inability to pay, though, all three companies received partial suspensions and will pay over $3.7 million in civil penalties, the FTC said.
Commissioners voted unanimously for the settlement, which is the first bought under the 2016 Better Online Ticket Sales (BOTS) Act. This legislation forbids organizations from circumventing protections that ticket vendors put in place to limit purchases.
Acting FTC chairwoman Rebecca Kelly Slaughter said the penalties served as a warning to ticket scalpers as the world prepares for live events to resume after the pandemic.
According to Slaughter: "The settlements our staff negotiated with these alleged BOTS Act violators make clear that serious consequences will befall those who cheat fans out of a fair shot to secure tickets to live events. The civil penalty amounts in these settlements are much higher than the revenues that the defendants raked in through the conduct charged in the complaints."
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