Antitrust Org Takes On Paperless

The issues of ticket ownership and restricted paperless ticketing got the once-over in a recent report from the American Antitrust Institute, which concluded that without competition in the secondary market, ‘prices can increase, output decrease, and incentives for innovation diminish.’

The 71-page paper, authored by former Federal Trade Commission policy analyst James Hurwitz, presents extensive research on the history of ticketing, its major players, ticket formats, recent developments in the industry and justifications for paperless tickets.

Hurwitz notes that restrictive paperless ticketing can prevent ticketholders from sharing, giving away or reselling their tickets and may “unjustifiably limit consumer choice and depart from bedrock competitive market principles.”

“We see restrictive paperless ticketing as a threat to the open market and consumer fairness, and call on the FTC and other government officials to investigate this emerging practice,” AAI President Albert Foer said in a statement. “An FTC investigation and economic analysis will inform the industry and consumers about problems worthy of correction, as well as assist legislative efforts and, hopefully, private initiatives to address problems resulting from these practices.”

Foer noted in a recent New York Times op-ed that the AAI received a “modest” contribution last year from an advocacy group financed in part by StubHub.

Paperless ticketing has become a contentious issue. After the state of New York passed legislation in 2010 that protected consumers’ rights to transfer paperless tickets, a group called the Fans First Coalition began campaigning against scalpers that often abuse such measures.

Fans First counts Live Nation, Ticketmaster, Front Line Management, Bill Silva Presents, Red Light Management and Jam Productions among its members. The group has stated it aims to stand up for fans on issues “related to improving access to reasonably priced tickets and enhanced protection against fraudulent business practices.”

Fans First President Michael Marion responded to the AAI paper in a statement, noting “it’s hardly a surprise that AAI would author a paper benefiting StubHub after receiving contributions from StubHub’s lobbying team. Paperless tickets are nothing more than a way of getting fans good seats at face value. Efforts to limit their use are an assault on artists, teams, venues and fans.”

Another group, the Fan Freedom Project, has also lobbied on behalf of fans regarding paperless ticketing, albeit with an entirely different agenda.

FFP is backed by StubHub and National Consumers League and takes the view that “making it hard to transfer tickets or give away concert tickets as gifts is not fan friendly.”

The group applauded the AAI paper on its website, stating “Restrictive paperless tickets not only pose a huge inconvenience for fans, they take away our basic rights to do with our tickets what we choose. They also have a huge impact on the competitive marketplace for event tickets and will ultimately lead to higher prices for all.”

The AAI paper concludes with a call for legislative remedies to the paperless ticketing issue, which the organization writes may offer “quicker and more focused benefits (than litigation), and, based on the available evidence, appear to be warranted.”

States including Florida, Minnesota, New Jersey, and North Carolina are poised to consider such legislation this year.