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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs, and webinars with more analysis in these areas. We understand that keeping on top of the rapidly evolving regulatory landscape is more important than ever for businesses seeking to offer new and ground-breaking technologies.
Regulatory Announcements
Justice Department and FTC Announce First Enforcement Actions for Violations of the Better Online Ticket Sales Act Details Written by IVN
Washington, DC - The Department of Justice, together with the Federal Trade Commission (FTC), today announced three settlements resolving alleged violations of the Better Online Ticket Sales (BOTS) Act. These are the first enforcement actions that the department and the FTC have brought under the BOTS Act.
Enacted in 2016, the BOTS Act aims to prevent ticket brokers from buying large numbers of event tickets and reselling them to interested customers at inflated prices. To achieve that goal, the BOTS Act prohibits a person from circumventing access controls or measures used by online ticket sellers (such as Ticketmaster) to enforce ticket-purchasing limits. It also prevents the resale of tickets obtained by knowingly circumventing access controls.
Tuesday, January 26, 2021
Last week marked a double milestone for the FTC: Rebecca Slaughter assumed the role of Acting Chair, and the agency brought its first enforcement action under the Better Online Ticket Sales Act (“BOTS Act”), 15 U.S.C. § 45c(a)(1).
Enacted in 2016 but somewhat dormant until now, the BOTS Act entitles the FTC to proceed against any person who “circumvent[s] a security measure, access control system, or other technological control or measure on an Internet website or online service that is used by the ticket issuer to enforce posted event ticket limits or to maintain the integrity of posted online ticket purchasing rules.” The statute is meant to address ticket resellers using programs or other pieces of technology like bots to instantly buy up hundreds or thousands of tickets to a concert or game as soon as they go on sale, only to sell them again at a massive upcharge.
BROOKLYN, N.Y. (Legal Newsline) – The federal government is suing Just In Time Tickets, claiming the company are using bots to scoop up tens of thousands of tickets for resale.
These actions violate the Better Online Ticket Sales Act, the Federal Trade Commission alleges in a Jan. 14 lawsuit filed in New York federal court. This has been going on for the last four years, the FTC claims, and Just In Time Tickets has exceeded posted ticket limits to “many popular events.”
“Defendants have used hundreds of thousands of fictitious Ticketmaster accounts, multiple credit cards (including some in the names of fictitious individuals), and proxy or spoofed IP addresses to bypass, trick, or otherwise avoid security measures… that would have otherwise blocked or prevented them from obtaining so many tickets,” the lawsuit says.
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.