The BOTS Act is Toothless

Bots have become a major problem for Ticketmaster and the producers of the hit musical “Hamilton,” but a law before the U.S. Senate outlawing bots is not generating much enthusiasm from the primary ticketing industry.

Same goes for StubHub, whose own lobbyist, Tod Cohen, said the company supports Kansas Sen. Jerry Moran’s Better Online Ticket Sales Act, but is lukewarm to the idea that the legislation will have a significant impact.

The truth is that neither Ticketmaster nor StubHub got the bill they had been pushing for. StubHub has been lobbying for legislation to force unprecedented disclosure rules on Ticketmaster and prohibit paperless ticketing and other practices that keep inventory off Stubhub. Ticketmaster wants Congress to do something about speculative ticket listing and prevent brokers from listing tickets they don’t actually own.

Neither side got the major concessions they wanted which, in a way, is a sign that our democracy is working. While both sides are calling the legislation a step in the right direction, they also quickly concede that the current bill will have very little impact.

Why? For one, the Bots Act is light on details as to how it would police ticketing sales. Enforcement would be kicked up to the Federal Trade Commission, although it’s unclear how it would go after scalpers who use bots or how it would pursue bot users operating in the U.S. It would take significant resources and multiple cooperating federal and state law enforcement agencies to bring down large scale scalping operations. Real enforcement would also mean empowering companies like Ticketmaster to assist regulators.

Granting TM a private right of action to sue and go after bad actors would do a lot more to stop bots than simply passing the burden off to the FTC. Stopping bots would also require some coordination from Stubhub, which could help authorities identify individuals who sell tickets purchased with bots. That’s what real enforcement would look like – a coordinated end-to-end strategy where bot users are pursued by regulators from purchase to sale.

The only way that’s going to happen is if both Ticketmaster and Ebay (Stubhub’s owner) can come to agreement. Right now, the two competitors are so far apart on the future of ticketing that compromise seems unlikely. And the result is a high-profile piece of legislation that’s pretty feckless and probably won’t change much of anything.