Ticketmaster seems to have been granted a reprieve in its ongoing ‘Scalpergate’ class action lawsuit.
A California federal judge has tentatively granted Ticketmaster’s request to arbitrate the class-action suit. The suit alleged that Ticketmaster violated antitrust and consumer protection laws by helping scalpers re-sell tickets online.
The Toronto Star published an exposé on Ticketmaster’s involvement in re-selling scalper tickets online. An undercover reporter met with representatives of Ticketmaster’s TradeDesk platform, filming the representatives fielding questions about scalping.
The video showed just how easy it is for scalpers to re-sell tickets using the platform, allowing Ticketmaster to double-dip on fees.
The reporter specifically asks questions about what happens when Ticketmaster finds out, but the TradeDesk rep waves the questions away. He said Ticketmaster turns a blind eye to resellers who use bots and fake IDs to purchase tickets en masse.
TradeDesk allows scalpers to sync their Ticketmaster accounts to resale sites on StubHub, Vivid Seats, and TradeDesk. Reseller fees through these platforms allow Ticketmaster to double dip in fees generated from ticket sales. The practice clearly violates Ticketmaster’s own policy against using fake information for ticket sales.
Once the report gained wider attention, several United States law firms started working on class-action lawsuits.
Merchant Law Group threatened a suit worth more than $100 million in damages, with the Toronto Star video evidence integral to proving these cases.
Ticketmaster president Jared Smith attempted some damage control in an interview with Billboard, saying his company doesn’t turn a blind eye to misuse of their products. Smith maintains that Ticketmaster blocks resellers, but admitted TradeDesk is a weak point.
“We probably don’t do enough to look into TradeDesk even though it’s hard and it’s not as obvious as people are suggesting it is.”
Smith says the Toronto Star’s exposé has been a headache and frustrating to deal with. He tried to spin Scalpergate as a generally accepted practice, rather than a lifting of the curtain on shady practices.
The move to arbitration means that the suit could be resolved in confidential proceedings, meaning the public won’t learn the outcome. Ticketmaster also argues that they can’t be sued by their customers, due to binding arbitration agreements in the terms of service accepted at the sale of a ticket.