Existing law provides comprehensive regulation of ticket sellers and makes violations of those provisions a misdemeanor. Existing law imposes various refund requirements on a ticket seller, including a requirement to issue a refund upon request to a ticket purchaser for canceled, postponed, or rescheduled events. Existing law also imposes various disclosure requirements on a ticket seller, including a requirement to disclose to a purchaser the location of the seat represented by the ticket, as specified.

This bill would revise and recast those provisions by expanding the definition of a ticket seller to include a primary contractor or platform, as defined, and would instead apply the refund requirement relating to the postponement or rescheduling of an event only to primary contractors. The bill would impose various disclosure requirements on ticket sellers relating to ticket price, including that the ticket seller would be required to display the total cost and fees for a ticket prior to the ticket being selected for purchase. prohibited from advertising, displaying, or offering a price for a ticket that does not include all fees or charges that must be paid in order to purchase the ticket other than taxes or fees imposed by a government on the transaction. The bill would prohibit the resale of tickets that were initially offered at no charge and that were knowingly obtained using software or services that circumvent controls or measures that ensure an equitable ticket buying process for event attendees, and would require a ticket seller to provide printed tickets for a cellular phone-free telephone-free event, as defined, at the same price that a mobile or electronic ticket is sold. The bill would impose various requirements on a primary contractor relating to the resale of tickets, including prohibiting a primary contractor from restricting the resale of tickets.

By expanding the scope of existing provisions regulating ticket sellers and imposing new requirements on ticket sellers and primary contractors, the violation of which would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides comprehensive regulation of ticket sellers and makes violations of those provisions a misdemeanor. Existing law imposes various refund requirements on a ticket seller, including a requirement to issue a refund upon request to a ticket purchaser for canceled, postponed, or rescheduled events. Existing law also imposes various disclosure requirements on a ticket seller, including a requirement to disclose to a purchaser the location of the seat represented by the ticket, as specified.

This bill would revise and recast those provisions by expanding the definition of a ticket seller to include a primary contractor or platform, as defined, and would instead apply the refund requirement relating to the postponement or rescheduling of an event only to primary contractors. The bill would impose various disclosure requirements on ticket sellers relating to ticket price, including that the ticket seller would be required to display the total cost and fees for a ticket prior to the ticket being selected for purchase. The bill would require a primary contractor to make various disclosures regarding the total number of tickets available and the price or price range at which those tickets will be sold at least 7 days before tickets are made available, except as specified. The bill would prohibit the resale of tickets that were initially offered at no charge and would require a ticket seller to provide printed tickets for a cellular phone-free event, as defined, at the same price that a mobile or electronic ticket is sold. The bill would impose various requirements on a primary contractor relating to the resale of tickets, including prohibiting a primary contractor from restricting the resale of tickets.

Existing law, the California Privacy Rights Act of 2020 (CPRA), approved by the voters as Proposition 24 at the November 3, 2020, statewide general election, amended, added to, and reenacted the California Consumer Privacy Act of 2018, imposing various obligations on businesses with respect to personal information, as defined. The CPRA requires a business to inform consumers of the categories of personal information to be collected and the purposes for which the categories of personal information are collected or used and whether that information is sold or shared.

This bill would prohibit a primary contractor from using personally identifiable information except to the extent necessary to facilitate a request to transfer a ticket from a purchaser to a resale buyer and to market a ticket sellers products or services to a resale buyer, as specified.

The CPRA authorizes the Legislature to amend the act to further the purposes and intent of the act by a majority vote of both houses of the Legislature, as specified.

This bill would declare that its provisions further the purposes and intent of the CPRA.

By expanding the scope of existing provisions regulating ticket sellers and imposing new requirements on ticket sellers and primary contractors, the violation of which would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides comprehensive regulation of ticket sellers and makes violations of those provisions a misdemeanor. Existing law requires imposes various refund requirements on a ticket seller seller, including a requirement to issue a refund upon request to a ticket purchaser for canceled, postponed, or rescheduled events. Existing law also requires imposes various disclosure requirements on a ticket seller seller, including a requirement to disclose to a purchaser the location of the seat represented by the ticket, as specified.

This bill would require a ticket seller to disclose to a purchaser the portion of the ticket price that represents a fee or surcharge and a link to an internet webpage that includes the refund requirements described above. By expanding the scope of a crime, this bill would impose a state-mandated local program. revise and recast those provisions by expanding the definition of a ticket seller to include a primary contractor or platform, as defined, and would instead apply the refund requirement relating to the postponement or rescheduling of an event only to primary contractors. The bill would impose various disclosure requirements on ticket sellers relating to ticket price, including that the ticket seller would be required to display the total cost and fees for a ticket prior to the ticket being selected for purchase. The bill would require a primary contractor to make various disclosures regarding the total number of tickets available and the price or price range at which those tickets will be sold at least 7 days before tickets are made available, except as specified. The bill would prohibit the resale of tickets that were initially offered at no charge and would require a ticket seller to provide printed tickets for a cellular phone-free event, as defined, at the same price that a mobile or electronic ticket is sold. The bill would impose various requirements on a primary contractor relating to the resale of tickets, including prohibiting a primary contractor from restricting the resale of tickets.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides comprehensive regulation of ticket sellers and makes violations of those provisions a misdemeanor. Existing law requires a ticket seller to issue a refund upon request to a ticket purchaser for canceled, postponed, or rescheduled events. Existing law also requires a ticket seller to disclose to a purchaser the location of the seat represented by the ticket, as specified.

This bill would require a ticket seller to disclose to a purchaser the portion of the ticket price that represents a fee or surcharge and a link to an internet webpage that includes the refund requirements described above. By expanding the scope of a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 8 (Friedman) - Ticket sellers

Bill Summary:

AB 8 makes various changes to laws governing ticket sellers and event ticket sales.

Fiscal Impact:

Unknown court workload cost pressures to adjudicate additional misdemeanor offenses for violations of the requirements and prohibitions established by this bill (Trial Court Trust Fund, General Fund).

Background:

The Ticket Buyer Bill of Rights is a set of principles consumer advocacy groups and others believe should serve as a framework for ticketing legislation that can improve the live events ticketing market that serves millions of fans each year. The Bill of Rights features four pillars:

1. The Right to Transferability, where ticketholders decide how to use, sell or give away their tickets if they wish and not the entity that previously sold the tickets;

2. The Right to Transparency, which includes all-in pricing and disclosures of relevant information for the purchasing decision;

3. The Right to Set the Price, so that companies who originally sold the tickets cannot dictate to fans for what price they can or cannot resell their purchased tickets, and;

4. The Right to a Fair Marketplace, where fans compete with actual humans, not illegal software bots, for tickets.

Specifically, the Ticket Buyer Bill of Rights includes:

• “All-in, upfront pricing – no surprise fees at checkout.
• Mandating primary ticket-selling companies to report all ticket bot activity to the appropriate authorities.
• Disclosure of how many tickets are available to the general public at the time of “on sale.”
• Clear and conspicuous disclosure when a ticket seller does not have a ticket in their possession or contractual right.
• The guarantee of unrestricted transfer of all tickets.
• A prohibition on deceptive URLs and other fraudulent reseller practices.

This framework is meant to provide guidance for legislative action to ensure consumer protection in ticketing sales.

Various aspects of the problems consumers have encountered in their attempts to purchase tickets have been the source of a number of legislative efforts. AB 329 (Pan, Chapter 325, Statutes of 2013) made it a misdemeanor to intentionally use or sell software to circumvent a security measure, access control system, or other control or measure on a ticket seller’s internet website that is used to ensure an equitable ticket buying process. In 2021, AB 1556 (Friedman, Chapter 180, Statutes of 2021) responded to concerns stemming from customer experiences with cancelled or postponed events by requiring that a refund be made within 30 calendar days of the cancellation if an event is cancelled and a refund within 30 days upon the ticket purchaser’s request for postponed, rescheduled, or replaced events.

Proposed Law:

• Updates the definition for a “ticket seller” to specify a ticket seller is a person who, for compensation, commission, or any other consideration or thing of value, sells or resells admission tickets to a sporting, musical, theatrical, or any other event, including a primary contractor or a platform operator.
  • Maintains the exemptions under current law for entities that are not considered a ticket seller, but defines those exempt entities as a ticket seller for purposes of complying with refund responsibilities and the prohibition in this bill on reselling tickets if the ticket was initially offered at no charge.
• Updates the definition of “primary contractor” to include an agent of the person or organization that is responsible for the event for which tickets are being sold
• Adds the following new definitions:
  • “Cellular telephone-free event” means an event in which the organizer prohibits event attendees from retaining possession of their cellular telephone during the event by collecting and securing their cellular telephone or otherwise.
  • “Platform operator” means a person that is responsible for operating a marketplace that enables consumers to purchase, sell, or resell tickets.
• Provides that nothing in this bill prohibits a local agency from imposing any local fees or taxes.
• Maintains provisions under existing law related to contracting to sell or accepting payments for a deposit for the sale of tickets unless certain conditions are met and the prohibition on ticket sellers representing they can deliver a ticket at a specific price.
• Requires a ticket seller who is selling tickets to a cellular telephone-free event to provide a printed ticket for sale and prohibits them from charging more for a printed ticket or imposing a fee that is more than the fee for a mobile or electronic ticket.
• Maintains provisions under existing law that require a ticket seller to disclose the seats to the purchaser prior to sale via a description or a map the location of the seat or seats represented by the ticket or tickets and for those who include tickets to an event in conjunction with the sale of a tour or event package to disclose in any advertisement or promotion the price charged or allotted for the tickets.
• Prohibits a ticket seller from advertising, displaying, or offering a ticket for sale without including all fees that must be paid in order to purchase the ticket, other than taxes imposed by a government on the transaction. States any fees or charges included within the price of a ticket may be separately stated, only if the disclosure is not false or misleading or made with an intent to deceive, including but not limited to, by bundling government taxes or fees with any component of the price, and will not be presented prominently or in the same or larger size as the price of the ticket. Prohibits the price of a ticket from increasing during the purchase process at any point after the ticket has been selected by the purchaser, including, but not limited to, increasing the total amount due by adding mandatory fees or charges after ticket selection other than taxes or fees imposed by a government on the transaction.
• Requires a ticket seller to provide a link to an internet web page that includes the refund requirements for ticket sellers, when a ticket seller includes a ticket with the sale of a tour or event package, as specified, and where the price is disclosed for tickets.
• Prohibits any person from knowingly reselling or offering to resell a ticket that the person knows was obtained using software or services that circumvent a security measure, access control system, or other control or measure that is used to ensure an equitable ticket buying process for event attendees, and that was not obtained for the person’s own use or the use of their invitees, employees, or agents.
• Makes it unlawful to resell or offer to resell a ticket or other evidence of right of entry to any place of entertainment if the ticket was initially offered to the public at no charge and access to that ticket is not contingent upon providing a form of monetary consideration.
• States the duties and obligations imposed by this title are cumulative with any other duties or obligations imposed under other law and will not be construed to relieve any party from any duties or obligations imposed under other law.

Related Legislation:

SB 785 (Caballero, 2023) revises and recasts laws regulating ticket sellers, including establishing various categories of ticket sellers with different provisions applying to each and increasing penalties for violations.SB 785 is pending in the Assembly Privacy and Consumer Protection Committee.

SB 829 (Wilk, 2023) prohibits exclusivity contracts for ticket sales between venues and ticket sellers, as specified. SB 829 is pending in the Assembly Arts, Entertainment, Sports, and Tourism Committee.

Staff Comments:

It is unknown how many prosecutions for misdemeanor violations will be brought as a result of this bill. However, it generally costs about $1,000 to operate a courtroom for one hour. Consequently, if the additional misdemeanor cases take 50 or more hours of court involvement across the State, the cost pressures of this measure would surpass this committee’s Suspense File threshold. Misdemeanor charges carry the potential for incarceration, therefore certain defendants’ rights are attached to the proceedings. These include the right to a jury trial and the right to counsel (at public expense if the defendants are unable to afford the costs of representation) which could lead to lengthier and more complex court proceedings. Although courts are not funded on the basis of workload, increased staff time and resources may create a need for increased funding for courts from the General Fund (GF) to perform existing duties. Numerous trial court operations are funded through the imposition and collection of criminal fines and fees. However, the Legislature has reduced and eliminated criminal fines and fees over the past decade. As a result, the 2023-24 budget includes an ongoing annual allocation of $105.1 million backfill from the General Fund in order to address declining revenue to the Trial Court Trust Fund.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 8 (Author:Friedman)

Version: June 19, 2023

Hearing Date: July 11, 2023

Fiscal: Yes

Urgency: No

Consultant: CK

SUBJECT

Ticket sellers

DIGEST

This bill reworks and bolsters the laws governing ticket sellers, including expanding the definition of who is covered and requiring clear pricing transparency.

EXECUTIVE SUMMARY

In addition to more infamous ticket buying debacles such as the roll out of tickets for Taylor Swift’s Eras Tour and the fees charged for tickets to Beyoncé’s most recent tour, most consumers have faced the well-documented issues with purchasing tickets to sporting events, concerts, and other live entertainment. This includes exorbitant and hidden fees, nearly instantaneous ticket sellouts followed by price gouging on the secondary market, and other unethical industry practices. Fingers are pointed in all different directions as to who or what is responsible.

This bill attempts to address the consumer protection issues in this arena by amending the chapter of law governing ticket sellers. The bill revises and recasts these provisions, expanding the scope of who it applies to and establishing new protections. The new law will cover primary contractors, those that put on the event, and platform operators who operate marketplaces for selling and reselling tickets. The bill requires pricing transparency with inclusion of all fees that must be paid in the advertised or listed price.

The bill is supported by CALPIRG and the Economic Security Project Action. It is opposed by sports teams and other industry players, including the Oakland Athletics. The bill passed out of the Senate Business, Professions, and Economic Development Committee on an 11 to 0 vote.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Establishes the Unfair Competition Law (UCL), which provides a statutory cause of action for any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising, including over the internet. (Bus. & Prof. Code § 17200 et seq.)
2. Establishes the False Advertising Law (FAL), which proscribes making or disseminating any statement that is known or should be known to be untrue or misleading with intent to directly or indirectly dispose of real or personal property. (Bus. & Prof. Code § 17500 et seq.)
3. Regulates “ticket sellers” in Chapter 21 of Division 8 of the Business and Professions Code (Chapter 21). (Bus. & Prof. Code § 22500 et seq.)
4. Defines a ticket seller as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event. Clarifies that the following are not ticket sellers subject to various sections of the bill:
   1. an officially appointed agent of an air carrier, ocean carrier or motor coach carrier who purchases or sells tickets in conjunction with a tour package accomplished through the primary event promoter or their agent by written agreement.
   2. any person who sells six tickets or less to any one single event, provided the tickets are sold off the premises where the event is to take place, including, but not limited to, designated parking areas and points of entry to the event.
   3. any primary contractor (defined as the person or organization responsible for the event for which tickets are being sold) or seller of tickets for the primary contractor operating under a written contract with the primary contractor.
   4. any nonprofit charitable tax-exempt organization selling tickets to an event sponsored by the organization. (Bus. & Prof. Code §§ 22503.6, 22504, 22511.)
5. Imposes various requirements on ticket sellers. A violation of any of these provisions constitutes a misdemeanor and may subject the ticket seller to civil liability. These requirements include that tickets sellers:
   1. have a permanent business address from which tickets may only be sold and that the address be included in any advertisement or solicitation, a violation of which constitutes a misdemeanor punishable by imprisonment or a fine not exceeding $2,500 or by both. Provides that a person who engages, has engaged, or proposes to engage in a violation of this specific requirement is liable for a civil penalty not to exceed $2,500 for each violation;
   2. maintain records of ticket sales, deposits, and refunds;
   3. prior to sale, disclose to the purchaser by means of description or a map the location of the seat or seats represented by the ticket or tickets;
   4. make any partial or full deposit received on a future event for which tickets are not available refundable, except for a service charge of not more than 10 percent until tickets for the event are actually available;
   5. disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller;
   6. provide a refund within 30 days for the ticket price of an event which is canceled;
   7. provide a refund, upon request, within 30 days, for the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time;
   8. provide a bond of not more $50,000 to provide for any refunds in a local jurisdiction that requires this; and
   9. disclose in any advertisement or promotion for any event that a service charge is imposed and added to the actual ticket price. (Bus. & Prof. Code §§ 22500-22511.)
6. Prohibits a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified. Authorizes a ticket seller to accept a deposit from a prospective purchaser as part of an agreement that the ticket seller will make best efforts to obtain a ticket at a specified price or price range and within a specified time, provided that the ticket seller informs the purchaser orally at the time of the contract or receipt of consideration, whichever is earlier, and in writing within two days, of the terms of the deposit agreement, and includes in the oral and written notice other required disclosures. (Bus. & Prof. Code § 22502.1.)
7. Prohibits a ticket seller from representing that they can deliver or cause to be delivered a ticket at a specific price or within a specific price range and fail to deliver within a reasonable time at or below or within the price and range of prices stated. (Bus. & Prof. Code § 22502.2.)
8. Specifies that a ticket seller who violated this prohibition and violates 3) above is civilly liable to the ticket purchaser for two times the contracted price of the ticket, in addition to any sum expended in trying to attend the event, and reasonable attorney’s fees and court costs. (Bus. & Prof. Code § 22502.3.)

This bill:

1. Repeals Chapter 21 to revise and recast its provisions.
2. Expands the definition of “ticket seller” to include primary contractors and platform operators. Defines “platform operator” as a person that is responsible for operating a marketplace that enables consumers to purchase, sell, or resell tickets. “Primary contractor” means the person or organization that is responsible for the event for which tickets are being sold or an agent of that person or organization. The definition is also expanded to include resales and clarifies that it covers selling or reselling for any consideration or thing of value.
3. Requires a ticket seller who is selling tickets to a cellular telephone-free event, an event where cell phones are prohibited, to provide a printed ticket for sale and prohibits that ticket seller from charging more for a printed ticket, or imposing a fee that is more than the fee for a mobile or electronic ticket.
4. Prohibits a ticket seller from advertising, displaying, or offering a ticket for sale without including all fees that must be paid in order to purchase the ticket, other than government taxes imposed on the transaction. Permits any fees or charges included within the price to be separately stated only if the disclosure is not false or misleading or made with an intent to deceive, including by bundling government taxes or fees with any component of the price and is not presented prominently or in the same or larger size as the price of the ticket.
5. Prohibits the price of a ticket from increasing during the purchase process at any point after the ticket has been selected by the purchaser, including increasing the total amount due by adding mandatory fees or charges after ticket selection other than government taxes or fees.
6. Requires a ticket seller to provide a link to a website that includes the refund requirements for ticket sellers established hereto. Amends one of the existing refund requirements to require the primary contractor to refund the ticket price of an event that is postponed, rescheduled, or replaced with another event at the same date and time.
7. Makes it unlawful for any person to knowingly resell or offer to resell a ticket that the person knows was obtained using software or services that circumvent a security measure, access control system, or other control or measure that is used to ensure an equitable ticket buying process for event attendees, and that was not obtained for the person’s own use or the use of their invitees, employees, or agents.
8. Makes it unlawful to resell or offer to resell a ticket or other evidence of right of entry to any place of entertainment if the ticket was initially offered to the public at no charge and access to that ticket is not contingent upon providing a form of monetary consideration.
9. Clarifies that the duties and obligations imposed by it are cumulative with any other duties or obligations imposed under other law, and shall not be construed to relieve any party from any duties or obligations imposed under other law.

COMMENTS

1. Ticketing woes: anti-consumer practices and antitrust issues

Ticketing for major sports events, concerts, and other live entertainment has drawn many critics for a variety of anti-consumer practices. This includes speculative sales, where ticket sellers sell tickets they do not actually have at the time of the sale.

One practice is the use of automated software or “bots” to rapidly buy up tickets to in-demand events that the person deploying the bots then turns around and sells at a hefty markup. This has been such a nefarious process that the federal government passed a law in 2016 to stop people from employing this scheme, the Better Online Ticket Sales Act (BOTS Act). The BOTS act prohibits the circumvention of a security measure, access control system, or other technological control measure used online by a ticket issuer. The Act also prohibits selling or offering to sell an event ticket obtained through such a circumvention violation if the seller participated in, had the ability to control, or should have known about the violation. The act applies to event tickets for public concerts, theater performances, sporting events, and similar activities at venues with seating capacity of over 200.

The FTC enforced the act against three New Yorkers that collectively made over $26 million in revenue over the matter of a few years:

The defendants pulled off the scheme by using bots on the Ticketmaster website. The programs—which went by the names Automatick, Tixman and Tixdrop—were capable of repeatedly searching web pages for available tickets and then automatically reserving them.

In addition, the defendants used hundreds of credit cards belonging to fake people, and routed their internet activity to the Ticketmaster page through spoofed IP addresses. “In many instances, Defendants also did not use their address as the primary address, shipping address, or billing address for their Ticketmaster accounts. Instead, they used over 550 addresses that were either fake or unrelated to their business,” the FTC alleged in a court complaint.^[1]

However, as the author points out, the BOTS act lacks a consumer enforcement mechanism and is rarely enforced. In fact, this FTC enforcement action in early 2021 was the first time the FTC brought such an action.

The lack of healthy competition in the ticket selling world is also a primary concern of consumer advocates and ticket buyers. The worst culprit according to many is Live Nation Entertainment. In 2010, the company, which is a massive events promoter and venue operator, merged with Ticketmaster, a ticket sales giant. Together they control an estimated 70 percent of the ticketing and live event venues market. The merged entity was responsible for the infamous Taylor Swift ticketing debacle:

It’s no secret that Taylor Swift fans were outraged in November 2022 when millions flocked to Ticketmaster.com to grab tickets to see the heartbreak queen for the first time since 2018 and the website crashed. The long wait lines and frozen screens sparked an uproar with fans, blaming Ticketmaster for ruining their chances to see the pop star.

“As the leading player, we have an obligation to do better,” said Joe Berchtold, Live Nation Entertainment president and chief financial officer, at the hearing Tuesday.

This is not the first time consumers have called for the breakup of Ticketmaster and Live Nation. It’s also not the first time the Department of Justice has been reportedly looking into alleged misconduct by the company.

When the Live Nation and Ticketmaster merger was approved in 2010, it was under the condition of a consent decree. Among other things, the purpose of that agreement was to forbid Live Nation from retaliating against a venue for using a ticketer other than Ticketmaster. After an investigation, in 2019 the DOJ made its most significant enforcement action of an antitrust decree in 20 years when it alleged Live Nation Entertainment violated that decree. The company settled with the government.^[2]

The near-monopoly power has created concerns among many that Live Nation will retaliate if you go with a ticketing company other than their Ticketmaster operation and in many cases exclusivity agreements require Ticketmaster to be used:

“In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter will look to get the best deal from the venue; however, in this case the promoter and the venue are part of the same corporate entity so the line items are essentially Live Nation negotiating to pay itself,” [one musician] said.

The band told CNBC if they want to play a certain size venue in a particular city, they are sometimes left no choice other than to use Live Nation because of the lack of competition in some regions. Then if they would like to use another ticketer other than Ticketmaster, they say that is not an option.

“Ticketmaster has created these exclusive contracts, once you sign that contract, a band is not allowed to come in and say, ‘we want to sell our tickets with X, Y, Z platform,’” said Jordan Cohen, one of the band’s eight members.

They even have a song with the lyric, “Live Nation is a monopoly.” “Due to Live Nation’s control across the industry, we have practically no leverage in negotiating,” Lawrence said.

While the company does have some competition, experts say no other firm currently stands a chance.^[3]

These concerns are not just from musicians and consumer advocates. The Justice Department was reported to have opened an investigation into Live Nation, focused on whether the company has “abused its power over the multibillion-dollar live music industry”:

Members of the antitrust division’s staff at the Justice Department have in recent months contacted music venues and players in the ticket market, asking about Live Nation’s practices and the wider dynamics of the industry, said the people, who spoke on the condition of anonymity because the investigation is sensitive. The inquiry appears to be broad, looking at whether the company maintains a monopoly over the industry, one of the people said.^[4]

This Committee’s federal counterpart felt the issue pressing enough to hold an oversight hearing to delve into the issue, “Location Change: That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment.”^[5] Senator Klobuchar explained the need for the hearing: “For too long, consumers have faced high fees, long waits, and website failures, and Ticketmaster’s dominant market position means the company faces inadequate pressure to innovate and improve.”^[6]

The practices above leave consumers in the lurch. They are forced to pay exorbitant service fees and other charges, exacerbated by the fact that the original ticket seller faces little competition. Then, if they are not among the lucky ones who can buy quickly, they are price gouged on the secondary market. A report by the United States Government Accountability Office (GAO) confirmed these practices and outcomes:

Consumer protection issues include difficulty buying tickets at face value and the fees and marketing practices of some market participants.

• Professional resellers, or brokers, have a competitive advantage over consumers in buying tickets as soon as they are released. Brokers can use numerous staff and software (“bots”) to rapidly buy many tickets. As a result, many consumers can buy tickets only on the resale market at a substantial markup.
• Some ticket websites GAO reviewed did not clearly display fees or disclosed them only after users entered payment information.
• “White-label” resale sites, which often appear as paid results of Internet searches for venues and events, often charged higher fees than other ticket websites—sometimes in excess of 40 percent of the ticket price—and used marketing that might mislead users to think they were buying tickets from the venue.^[7]

The GAO report also discussed potential solutions:

Selected approaches GAO reviewed, such as ticket resale restrictions and disclosure requirements, would have varying effects on consumers and businesses.

• Nontransferable tickets. At least three states restrict nontransferable tickets—that is, tickets whose terms do not allow resale. Nontransferable tickets allow more consumers to access tickets at a face-value price. However, they also limit consumers' ability to sell tickets they cannot use, can create inconvenience by requiring identification at the venue, and according to economists, prevent efficient allocation of tickets.
• Price caps. Several states cap the price at which tickets can be resold. But according to some state government studies, the caps generally are not effective because they are difficult to enforce.
• Disclosure requirements. Stakeholders and government research GAO consulted generally supported measures to ensure clearer and earlier disclosure of ticket fees, although views varied on the best approach (for example, to include fees in an “all-in” price or disclose them separately).

Some market-based approaches are being used or explored that seek to address concerns about secondary market activity. These approaches include technological tools and ticket-buyer verification to better combat bots. In addition, a major search engine recently required enhanced disclosures from ticket resellers using its advertising platform. The disclosures are intended to protect consumers from scams and prevent potential confusion about who is selling the tickets.

In response to growing concerns within the ticketing industry, a coalition of consumer groups, including the Consumer Federation of America, Consumer Action, and the National Consumers League published the “Ticket Buyer Bill of Rights,” which they describe as “a set of principles the nation’s leading consumer advocacy groups and others believe should serve as a framework for ticketing legislation that can improve the live events ticketing market that serves millions of fans each year.^[8] The Ticket Buyer Bill of Rights features five pillars:

The Right to Transferability, where ticketholders decide how to use, sell or give away their tickets if they wish and not the entity that previously sold the tickets;

The Right to Transparency, which includes all-in pricing and disclosures of relevant information for the purchasing decision;

The Right to Set the Price, so that companies who originally sold the tickets cannot dictate to fans for what price they can or cannot resell their purchased tickets;

The Right to a Fair Marketplace, where fans compete with actual humans, not illegal software bots, for tickets, and, lastly;

The Right to Recourse, where harmed fans retain the choice to seek remedies through the public court system and are not blocked by terms and conditions that force them into private arbitration.

1. Addressing consumer protection issues in ticket sales

Chapter 21 of Division 8 of the California Business and Professions Code provides a series of regulations governing “ticket sellers,” defined as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event. This explicitly excludes primary contractors, the people or organizations responsible for the event for which tickets are being sold. This bill repeals and revises and recasts this entire chapter in an attempt to address some of the consumer protection issues identified above.

Much of the chapter is maintained but the bill expands the scope of ticket sellers to which it applies and inserts a number of new protections.

First, the definition of “ticket seller” is revised to specifically include primary contractors as well as “platform operators.” This latter group are those responsible for operating a marketplace that enables consumers to purchase, sell, or resell tickets. This definition ensures that all ticket marketplaces are covered and that all industry players are held to the same standard.

Second, the bill directly addresses the issue of drip pricing and the lack of price transparency. Ticket sellers are prohibited from advertising, displaying, or offering tickets for sale without including all fees that must be paid in order to purchase the ticket, other than government taxes. Furthermore, the bills specifically prohibits the ticket price from increasing during the purchase process after the ticket is selected. The bill does allow for any fees or charges to be separately stated, but only if the disclosure is not false or misleading or made with an intent to deceive. However, the separately stated fees cannot be deceptively bundled with government taxes or fees or presented prominently or in the same or larger size as the actual price of the ticket. To ensure consumers are made fully aware of their refund rights, sellers are also required to include a link to a website listing them.

In addition, the bill addresses other problematic industry practices. For instance, some events are made to be “cellphone free” and either take possession of or simply prevent retention of attendees phones. As consumers are unable to access tickets on their phone easily, they are forced to pay higher fees for printed tickets. This bill requires printed tickets to be made available at such events and prohibits sellers from charging more for them. The bill also prohibits the practice of reselling tickets when they were initially offered to the public for free.

Finally, the bill prevents the sale or resale of tickets the seller knows were obtained using software or services that circumvent a security measure, access control system, or other control or measure that is used to ensure an equitable ticket buying process for event attendees, borrowing from the Federal BOTS Act, discussed above.

According to the author:

Average ticket prices have more than tripled since the mid-‘90s, and the fees that are tacked on to each ticket can be as high as 78% of the ticket price. While consumers are certainly feeling the pinch, ticket retailers are doing fine. Just last month Ticketmaster/LiveNation announced record profits, reporting a 2022 operating income up 125 percent from pre-pandemic levels to $732 million, and revenue up 44 percent to $16.7 billion.

The California laws governing ticket retailers were passed before the internet even existed - a fact that's become exceedingly clear as mega ticket sellers and resellers have used those rules to rip-off consumers eager to see their favorite artists. We need to make sure artists, performers, and venues can reach fans and sell tickets in an easier and more transparent way. We also need to update the law for how tickets are sold today.

We can keep the entertainment industry thriving in California, and protect the consumers at the same time. AB 8 adds important new consumer protections and transparency in three key ways.

First, AB 8 will protect all consumers from all types of ticket brokers. Current law only regulates “secondary ticket brokers” but exempts “primary ticket brokers” and doesn’t include secondary ticket sellers or resale platforms.

Next, the bill requires transparent pricing. Don’t you hate it when you go online to buy a ticket to an event and you are told that the ticket price is $50 each, and then you select two tickets and click over to the next page and those 2 tickets that you thought would be $100 are now $130 because of a $15 per ticket “service fee”. One more click to the next page to complete your order, and, adding insult to injury, they tack on another $5 to the cost for an “order processing fee”. Couldn’t they have just told you upfront that the tickets would have cost $135?

AB 8 will require that the full price of a ticket including all fees be provided to the consumer before they put their purchase in their online shopping cart for tickets sold by both primary and secondary ticket sellers. It will also require platforms, both original sale and resale, to disclose an exact location (section, row, seat number) of the tickets.

1. Stakeholder positions

CALPIRG writes in support of the bill:

Whether purchasing tickets for a concert or sporting event, more and more consumers are finding themselves misled by hidden fees and other unfair tactics that can make it hard to find the true price of a ticket. Transparency is critical to ensure a fair marketplace. Consumers need to know what they are paying for, and how much, up front in order to make informed purchases. Yet ticket sellers have gotten away with including hidden fees, unclear seat location information, and murky refund policies for many of their ticket sales. By not revealing the full price of the ticket—including fees—upfront, ticket vendors are misleading consumers and trying to make comparison shopping more difficult, frequently requiring them to pay fees that are up to 27-30% more than the advertised [price].

Consumers should know how much a ticket costs from the first, advertised listing price, not after clicking through several screens.

AB 8 would achieve a more fair and transparent ticket-buying process for consumers, where the advertised price is the final price. Additionally, AB 8’s most recent amendments will add language to better protect consumers from ‘bots’ that can quickly buy large quantities of tickets and then resell them at inflated prices, often to the detriment of real consumers.

. . .

While we would ultimately prefer a more robust reform of ticket sales that includes limits on ticket holdbacks and allows for the transferability of tickets after purchase, we believe that AB 8 in its current form will benefit consumers and is a step in the right direction to reform the ticket marketplace. We also think it’s important to keep moving forward to address these problems this year.

Writing in opposition, a coalition of professional baseball teams asserts that there is no problem to solve:

Based on our decades of experience providing an exceptional fan experience, we do not believe that AB 8 is necessary. In fact, in meetings that we have held with stakeholders and other interested parties, no one has referenced any issues with professional baseball. We believe that AB 8 will dramatically impact how we sell season and post season tickets, conduct marketing, hold successful promotional events, and effectively manage the distribution of our ticket supply in order to accommodate our fans.

SUPPORT

CALPIRG

Economic Security Project Action

OPPOSITION

Angels Baseball

City of Thousand Oaks

Forty Niners Football Company LLC,

Golden State Warriors

LA Rams

Los Angeles Dodgers LLC

Oakland Athletics

San Diego Padres

San Francisco Baseball Associates LLC (dba San Francisco Giants)

San Jose Sharks

RELATED LEGISLATION

Pending Legislation:

SB 478 (Dodd, 2023) makes it an unlawful business practice pursuant to the Consumer Legal Remedies Act to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges other than taxes imposed by a government. SB 478 is currently pending in the Assembly Privacy and Consumer Protection Committee.

SB 644 (Glazer, 2023) requires a hotel, third-party booking service, hosting platform, or short-term rental to allow a reservation to be canceled without penalty if the cancellation is commenced within 24 hours of the reservation being finalized so long as the reservation is made 24 hours or more prior to the day of check-in. The bill prescribes certain procedures for issuing the attendant refunds. It authorizes public prosecutors to bring civil actions seeking civil penalties. SB 644 is currently in the Assembly Appropriations Committee.

SB 785 (Caballero, 2023) reworks the laws governing ticket sellers, including creation of various categories of ticket sellers with different provisions applying to each. SB 785 is currently in the Assembly Arts, Entertainment, Sports, and Tourism Committee.

SB 829 (Wilk, 2023) prohibits the operator of an entertainment facility and a primary ticket seller from entering into a contract that provides for the primary ticket seller to be the exclusive ticket seller for the operator of the entertainment facility. SB 829 is currently in the Assembly Arts, Entertainment, Sports, and Tourism Committee.

Prior Legislation:

AB 1556 (Friedman, Ch. 180, Stats. 2021) requires for cancelled events, that a refund be made within 30 calendar days of the cancellation; and requires a ticket price at any event which is postponed, rescheduled, or replaced with another event at the same date and time be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request.

SB 342 (Hertzberg, Ch. 162, Stats. 2020) makes it unlawful to register, traffic in, or use the name of a professional sports team or the names of professional sports leagues, among others, in a domain or subdomain name of a website to sell tickets in a fraudulent, deceptive, or misleading manner. It provides a private right of action to a person who suffers an economic injury as a result of such misconduct.

AB 329 (Pan, Ch. 325, Stats. 2013) made it a misdemeanor to intentionally use or sell software to circumvent a security measure, access control system, or other control or measure on a ticket seller’s website that is used to ensure an equitable ticket buying process.

PRIOR VOTES:

Senate Business, Professions, and Economic Development Committee (Ayes 11, Noes 0)

Assembly Floor (Ayes 48, Noes 11)

Assembly Appropriations Committee (Ayes 11, Noes 3)

Assembly Arts, Entertainment, Sports, and Tourism Committee (Ayes 5, Noes 1)

Assembly Privacy and Consumer Protection Committee (Ayes 8, Noes 2)

**************

1. Michael Kan, 3 Scalpers Fined for Using Bots to Scoop Up Tickets on Ticketmaster (Jan. 22, 2021) PCMag, https://www.pcmag.com/news/3-scalpers-fined-for-using-bots-to-scoop-up-tickets-on-ticketmaster. All internet citations are current as of June 29, 2023. ↑

2. Emily Lorsch, Why Live Nation and Ticketmaster dominate the live entertainment industry (Jan 25, 2023) CNBC, https://www.cnbc.com/2023/01/25/the-live-nation-and-ticketmaster-monopoly-of-live-entertainment.html. ↑

3. Ibid. ↑

4. David McCabe & Ben Sisario, Justice Dept. Is Said to Investigate Ticketmaster’s Parent Company (Jan 24, 2023) The New York Times, https://www.nytimes.com/2022/11/18/technology/live-nation-ticketmaster-investigation-taylor-swift.html. ↑

5. Video of the hearing available at: https://www.judiciary.senate.gov/committee-activity/hearings/thats-the-ticket-promoting-competition-and-protecting-consumers-in-live-entertainment. ↑

6. News Releases, Klobuchar, Lee Announce Date of Senate Judiciary Committee Hearing on Problems in America’s Ticketing Markets (Jan. 17, 2023) Senator Amy Klobuchar website, https://www.klobuchar.senate.gov/public/index.cfm/2023/1/klobuchar-lee-announce-date-of-senate-judiciary-committee-hearing-on-problems-in-america-s-ticketing-markets. ↑

7. Event Ticket Sales: Market Characteristics and Consumer Protection Issues (Apr. 2018) GAO, https://www.gao.gov/assets/gao-18-347.pdf. ↑

8. Ticket Buyer Bill of Rights, https://www.ticketbuyerbillofrights.org/#:~:text=The%20Ticket%20Buyer%20Bill%20of%20Rights%20is%20a,year.%20The%20Bill%20of%20Rights%20features%20four%20pillars%3A. ↑

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Richard Roth, Chair

2023 - 2024 Regular

Bill No: AB 8 Hearing Date: June 26, 2023

Subject: Ticket sellers

SUMMARY:

Makes various changes to laws governing ticket sellers and event ticket sales.

NOTE:

Double-referral to the Senate Committee on Judiciary, second.

Existing law:

1. Defines a ticket seller as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event. Clarifies that the following are not a ticket seller subject to various requirements:
2. An officially appointed agent of an air carrier, ocean carrier or motor coach carrier who purchases or sells tickets in conjunction with a tour package accomplished through the primary event promoter or his or her agent by written agreement.
3. Any person who sells six tickets or less to any one single event, provided the tickets are sold off the premises where the event is to take place, including, but not limited to, designated parking areas and points of entry to the event.
4. Any primary contractor (defined as the person or organization responsible for the event for which tickets are being sold) or seller of tickets for the primary contractor operating under a written contract with the primary contractor.
5. Any nonprofit charitable tax-exempt organization selling tickets to an event sponsored by the organization. (Business and Professions Code (BPC) §§ 22503.6, 225034, 22511)
6. Establishes various requirements for ticket sellers, a violation of which constitutes a misdemeanor, including that they:
7. Have a permanent business address from which tickets may only be sold and that the address be included in any advertisement or solicitation, a violation of which constitutes a misdemeanor punishable by imprisonment or a fine not exceeding $2,500 or by both. Provides that a person who engages, has engaged, or proposes to engage in a violation of this specific requirement is liable for a civil penalty not to exceed $2,500 for each violation.
8. Maintain records of ticket sales, deposits, and refunds.
9. Prior to sale, disclose to the purchaser by means of description or a map the location of the seat or seats represented by the ticket or tickets.
10. Make any partial or full deposit received on a future event for which tickets are not available refundable, except for a service charge of not more than 10 percent until tickets for the event are actually available.
11. Disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller.
12. Provide a refund within 30 days for the ticket price of an event which is canceled.
13. Provide a refund, upon request, within 30 days, for the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time
14. Provide a bond of not more $50,000 to provide for any refunds in a local jurisdiction that requires this.
15. Disclose in any advertisement or promotion for any event that a service charge is imposed and added to the actual ticket price. (Business and Professions Code §§ 22500 – 22511)
16. Prohibits a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified. Authorizes a ticket seller to accept a deposit from a prospective purchaser as part of an agreement that the ticket seller will make best efforts to obtain a ticket at a specified price or price range and within a specified time, provided that the ticket seller informs the purchaser orally at the time of the contract or receipt of consideration, whichever is earlier, and in writing within two days, of the terms of the deposit agreement, and includes in the oral and written notice other required disclosures. (BPC § 22502.1)
17. Prohibits a ticket seller from representing that they can deliver or cause to be delivered a ticket at a specific price or within a specific price range and fail to deliver within a reasonable time at or below or within the price and range of prices stated. Specifies that a ticket seller who violated this prohibition and violates 3) above is civilly liable to the ticket purchaser for two times the contracted price of the ticket, in addition to any sum expended in trying to attend the event, and reasonable attorney’s fees and court costs. (BPC §§ 22052.2 and 22052.3)

This bill:

1. Updates the definition for ticket seller to specify that a ticket seller is a person who, for compensation, commission, or any other consideration or thing of value, sells or resells admission tickets to a sporting, musical, theatrical, or any other event, including a primary contractor or a platform operator. Maintains the exemptions under current law for entities that are not considered a ticket seller, but defines those exempt entities as a ticket seller for purposes of complying with refund responsibilities and the prohibition in this bill on reselling tickets if the ticket was initially offered at no charge.
2. Updates the definition of primary contractor to include an agent of the person or organization that is responsible for the event for which tickets are being sold
3. Adds the following new definitions:
4. “Cellular telephone-free event” means an event in which the organizer prohibits event attendees from retaining possession of their cellular telephone during the event by collecting and securing their cellular telephone or otherwise.
5. “Platform operator” means a person that is responsible for operating a marketplace that enables consumers to purchase, sell, or resell tickets.
6. Permits a local agency from imposing any local fees or taxes.
7. Maintains provisions under existing law related to contracting to sell or accepting payments for a deposit for the sale of tickets unless certain conditions are met and the prohibition on ticket sellers representing they can deliver a ticket at a specific price.
8. Requires a ticket seller who is selling tickets to a cellular telephone-free event to provide a printed ticket for sale and prohibits them from charging more for a printed ticket or imposing a fee that is more than the fee for a mobile or electronic ticket.
9. Maintains provisions under existing law that require a ticket seller to disclose the seats to the purchaser prior to sale via a description or a map the location of the seat or seats represented by the ticket or tickets and for those who include tickets to an event in conjunction with the sale of a tour or event package to disclose in any advertisement or promotion the price charged or allotted for the tickets.
10. Prohibits a ticket seller from advertising, displaying, or offering a ticket for sale without including all fees that must be paid in order to purchase the ticket, other than taxes imposed by a government on the transaction. States any fees or charges included within the price of a ticket may be separately stated, only if the disclosure is not false or misleading or made with an intent to deceive, including but not limited to, by bundling government taxes or fees with any component of the price, and will not be presented prominently or in the same or larger size as the price of the ticket. Prohibits the price of a ticket from increasing during the purchase process at any point after the ticket has been selected by the purchaser, including, but not limited to, increasing the total amount due by adding mandatory fees or charges after ticket selection other than taxes or fees imposed by a government on the transaction.
11. Requires a ticket seller to provide a link to an internet web page that includes the refund requirements for ticket sellers, when a ticket seller includes a ticket with the sale of a tour or event package, as specified, and where the price is disclosed for tickets.
12. Prohibits any person from knowingly reselling or offering to resell a ticket that the person knows was obtained using software or services that circumvent a security measure, access control system, or other control or measure that is used to ensure an equitable ticket buying process for event attendees, and that was not obtained for the person’s own use or the use of their invitees, employees, or agents.
13. Makes it unlawful to resell or offer to resell a ticket or other evidence of right of entry to any place of entertainment if the ticket was initially offered to the public at no charge and access to that ticket is not contingent upon providing a form of monetary consideration.
14. States the duties and obligations imposed by this title are cumulative with any other duties or obligations imposed under other law and will not be construed to relieve any party from any duties or obligations imposed under other law.

FISCAL EFFECT:

This bill is keyed fiscal by Legislative Counsel. According to the Assembly Committee on Appropriations the bill will result in ongoing cost pressures to the courts of an unknown but likely significant amount to adjudicate the new crimes this bill creates and the civil litigation authorized by this bill and ongoing cost pressures, potentially in the hundreds of thousands of dollars to low millions of dollars, for increased incarceration costs.

COMMENTS:

1. Purpose. The Author, the Consumer Federation of California, and California Public Interest Research Group are the Sponsors of this bill.

According to the Author, “The ticket marketplace in California badly needs updated rules to ensure it’s fair, transparent, and working for consumers. For the most part, the Ticket Sellers Act section in the Business and Professions code has not been updated since the late 1980s, with current statute failing to reflect how tickets are bought and sold and today. AB 8 solves two problems consumers face with the sale and use of tickets today, including: 1) Current law only regulates “secondary ticket brokers” but exempts “primary ticket brokers” and doesn’t include secondary ticket sellers or resale platforms. (B&P Code 22503.5). 2) Hidden fees/Drip Pricing

Hidden fees in for tickets to live events are common. Applying a strategy known as “drip pricing,” sellers advertise a deceptively low price that lures in consumers, revealing the full cost — including mandatory surcharges — only once the consumer is on the verge of completing the transaction. The practice is pervasive for concerts and other events that impose ticketing charges. Drip pricing has no legitimate business purpose and harms consumers in at least two key ways. First, the practice leads people to spend more money than they would if the full price were communicated upfront. While consumers can in theory walk away once the true price is revealed, studies show that many complete such transactions, given the time and effort that they have already invested. Second, even for consumers who abandon a transaction, drip pricing wastes time and severely complicates efforts to compare the actual prices of competing offers.”

1. Background.

Ticket Sellers and Mergers in the Last Decade. In 2010, the Justice Department approved a merger between Ticketmaster and Live Nation, two of the biggest companies in ticket sales in the world. At the time, Ticketmaster sold 141 tickets worth $8.9 billion in 2008. At the same time, Live Nation owned 120 theaters, and the combined company stood to achieve an estimated $6 billion/year.

According to The New York Times, the conditions of the merger included Ticketmaster divesting one of its ticket divisions and licensing its software to a competitor and being subject for 10 years to “‘tough antireltaliation provisions’ to prevent abuse of its power over concert tours, artist management, ticketing and theaters.” While originally the Justice Department determined that the merger was anticompetitive, these terms alleviated its concerns.

Many consumer advocates, politicians, and independent concern promoters were not in favor of the merger. In July 2010, 50 members of the House of Representatives sent a letter urging the Justice Department to oppose the deal.

According to The New York Times, “Ticketmaster and Live Nation have argued that by combining they would be able to reduce inefficiencies in the marketing and presentation of live events, which would help to revive the ailing music industry and ultimately benefit consumers.” Years later, Senator Amy Klobuchar called for the DOJ to investigate Live Nation in 2019, according to Rolling Stone.

A Recent Catalyst: Taylor Swift “Midnights” Album. On October 21, 2022, singer and songwriter Taylor Swift released an entire new album, “Midnights.” The album was an overnight success, and Taylor Swift, at 32, became the first artist ever to simultaneously capture all Top 10 spots with songs from the “Midnights” album.

Days after releasing the album, Swift announced her Eras Tour, the first of her musical tours since 2018 due to the COVID-19 pandemic. During the pandemic, Swift released three other albums in addition to “Midnights.”

Tickets were to go on sale on November 18, 2022. Pre-sale for tickets for select fans with certain corporate partnerships began as early as November 1, 2022. Ticketmaster and at least one tour date in Nashville noted that ticket prices could fluctuate based on demand at any given time.

On November 15, during presale, Ticketmaster’s website crashed following millions showing up to buy Swift’s concert tickets. After Ticketmaster determined there were at least questions as to whether there were enough tickets to meet buyer demand, Ticketmaster also cancelled its general ticket sale that was supposed to open on November 18, 2022. This meant that fans who otherwise would have paid hundreds of dollars to see Swift in concert were left to purchase them off of resale websites, where they were going for thousands of dollars (some even around $20,000). According to Forbes, Ticketmaster’s failure was caused in large part due to bot attacks, but also due to the failure of leadership to engage in meaningful practices and philosophies among employees to help them respond in a crisis.

US Judiciary Committee Hearing. Following public outcry, The New York Times reported the Justice Department opened an antitrust investigation into Ticketmaster, who merged with Live Nation Entertainment back in 2010. For her own part, Swift criticized the situation on social media, sharing with fans that she and her team asked multiple times if Ticketmaster could handle the demand of her fan base, and the company assured her it could.

On Tuesday, January 24, 2023, the US Senate Judiciary Committee had a hearing on the issue, focusing specifically on the Live Nation and Ticketmaster’s 2010 merger. Leading up to the hearing, Senator Klobuchar told Rolling Stone that she believed Live Nation Entertainment was a monopoly because, as a company, it has 70% of tickets for major concern venues; venue operators said that they were concerned about not getting Live Nation’s shows at their venues if they didn’t use Ticketmaster; the company utilized exclusivity deals that can last 3-7 years; hidden fees, some costing up to 75% of a ticket’s face value; and Live Nation is owning more and more venues, which was not the case in 2010 when the merger occurred.

In the January 2023 hearing, U.S. Senators questioned Live Nation and raised potential solutions to the problems above, including non-exclusivity of contracts between venues and ticketing agents, placing price caps on tickets, and working more closely with the FTC to stop speculative ticket sales. National media has been following the story since October and November of 2022.

Efforts to Respond to Consumer Protection Issues. Among other steps taken to drive more consumer-centric responses to the experiences highlighted above, consumer advocacy groups launched a campaign culminating in The Ticket Buyer Bill of Rights. According to its website, The Ticket Buyer Bill of Rights “is a set of principles the nation’s leading consumer advocacy groups and others believe should serve as a framework for ticketing legislation that can improve the live events ticketing market that serves millions of fans each year. The Bill of Rights features four pillars: 

1. The Right to Transferability, where ticketholders decide how to use, sell or give away their tickets if they wish and not the entity that previously sold the tickets; 
2. The Right to Transparency, which includes all-in pricing and disclosures of relevant information for the purchasing decision;  
3. The Right to Set the Price, so that companies who originally sold the tickets cannot dictate to fans for what price they can or cannot resell their purchased tickets, and, lastly; 
4. The Right to a Fair Marketplace, where fans compete with actual humans, not illegal software bots, for tickets.”

Specifically, The Ticket Buyer Bill of Rights includes:

• “All-in, upfront pricing – no surprise fees at checkout;
• Mandating primary ticket-selling companies to report all ticket bot activity to the appropriate authorities;
• Disclosure of how many tickets are available to the general public at the time of “on sale”;
• Clear and conspicuous disclosure when a ticket seller does not have a ticket in their possession or contractual right;
• The guarantee of unrestricted transfer of all tickets; and
• A prohibition on deceptive URLs and other fraudulent reseller practices.”

As stated above, this framework is meant to provide guidance for legislative action to ensure consumer protection in ticketing sales.

At the state level, legislatures have been taking action to ensure consumer protection with respect to ticket sellers, with a particular focus on Ticketmaster.

In June 2022, the New York legislature passed a bill to increase transparency in the ticket-buying process for live events like concerns and plays, whereby Ticketmaster and StubHub must disclose all fees upfront so that prices do not change during a transaction (for instance, in last step in checkout). Additionally, the New York Legislature introduced a bill in 2021 that would have instituted civil penalties for using ticket-purchasing software; required an online resale market to post the ticket price in advertisements or offers of resale; and required ticket prices to be disclosed prior to a customer purchasing a ticket, among other things.

In Colorado, a bill has been introduced this year that would prohibit “speculative ticketing,” or the process by which brokers sell tickets they do not possess. The bill would also require online companies to clearly display total, inclusive prices of all service charges and other fees included in the purchase of the ticket. According to The Denver Post, the bill also “expands the definition of deceptive trade practices to include the use of automation to buy tickets or circumvent limits, selling tickets without being upfront about all the fees, and increasing ticket prices once they have been selected.”

Moreover, Ireland’s Competition Consumer Protection Commission came to an agreement with Ticketmaster Ireland (TMI) that TMI should refrain from entering into an exclusivity clause with a venue, among other things.

June 16, 2023, the Biden Administration announced that Ticketmaster, along with other companies like SeatGeek and AirBnB, have agreed to offer consumers all-inclusive, up-front pricing. According to Reuters, President Biden said he was “focused on companies that slapped fees onto purchases at the end of the billing process, after consumers had done their comparison price shopping.” Live Nation committed to rolling out up-front pricing starting in September of 2023.

Ticketing Bills in the California Legislature. In California, two other bills hope to tackle this problem. SB 785 (Caballero of 2023) would make a number of changes to ensure ticket sellers must have the ticket in their possession prior to sale. It also changes violations and penalties for this offense, requires certain disclosures, provides definitions, provides refunds for consumers who cancel their tickets, and specifies this bill does not apply to events where tickets are distributed free of charge or any nonprofit, charitable, tax-exempt organization that sells tickets to an event sponsored by the organization. SB 829 (Wilk, 2023) prohibits an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility.

1. Related Legislation. SB 785 (Caballero, 2023) updates laws regulating ticket sellers by establishing new categories of ticket sellers and establishing various requirements for certain types of ticket sellers; prohibits an original ticket seller or a ticket reseller from listing, marketing, or selling a ticket before owning, possessing, or having the contractual right to the ticket; and prohibits event presenter likeness from being used on any website. (Status: The measure is in the Assembly Committee on Arts, Entertainment, Sports, and Tourism.)

SB 829 (Wilk, 2023) prohibits an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility, as specified. States this bill will not require an operator of an entertainment facility to enter into an agreement with a primary ticket seller or require that an operator of an entertainment facility have an agreement with multiple primary ticket sellers, where an entertainment facility does not include an amusement park or fair grounds. (Status: The measure is in the Assembly Committee on Assembly Committee on Arts, Entertainment, Sports, and Tourism.)

AB 1556 (Friedman, Chapter 180, Statutes of 2021) required, for cancelled events, that a refund be made within 30 calendar days of the cancellation. Required a ticket price at any event which is postponed, rescheduled, or replaced with another event at the same date and time be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request.

AB 472 (Cooley and Boerner Horvath) of 2021 would have prohibited a person from intentionally using or selling software or services to circumvent a security control or measure that is used to ensure an equitable campsite reservation making process for visitors, as specified. (Status: The measure was vetoed by the Governor.)

1. Arguments in Support. CALPIRG and the Consumer Federation of California write that consumers have a right to know how much tickets cost from the first, advertised listing price, rather than after clicking through several screens. They also argue that consumers should know how many tickets are available for purchase and that consumers should be able to resell tickets as they please. According to the organizations, “AB 8 would achieve a more fair and transparent ticket-buying process for consumers, where the advertised price is the final price. Additionally, AB 8’s most recent amendments will add language to better protect consumers from ‘bots’ that can quickly buy large quantities of tickets and then resell them at inflated prices, often to the detriment of real consumers. Broad public support for ticket reform has been brewing for the last several years, and these reforms offered by AB 8 are long overdue. As we emerge from the worst days of the COVID pandemic, Californians are looking for more and more opportunities to enjoy live events. And as people rush to buy tickets for these events, the broken nature of the ticket-selling system is becoming more and more clear.”

California Low-income Consumer Coalition, California Association for Micro Enterprise Opportunity, Consumer Federation of America, Consumer Reports, Consumer Watchdog, East Bay Community Law Center, Housing & Economic Right Advocates, Housing and Economic Rights Advocates, Older Women's League Sacramento Capitol, and Sports Fans Coalition write that “ticket sellers have gotten away with including hidden fees, unclear seat location information, and murky refund policies for many of their ticket sales. By not revealing the full price of the ticket including fees upfront, ticket vendors are misleading consumers and trying to make comparison shopping more difficult, frequently requiring them to pay fees that are 27 30% more than the advertised prize, if not more… AB 8 would achieve a more fair and transparent ticket buying process for consumers, where the advertised price is the final price. Additionally, AB 8 would stop online ticket vendors from artificially influencing ticket supply and controlling how consumers resell tickets after they are purchased, as well as better protect the data of consumers who use ticket resale platforms.”

1. Arguments in Opposition. The City of Thousand Oaks, home to the Bank of America Performing Arts Center (BAPAC) states that it is a “premier regional entertainment venue for patrons in Southern California, including Ventura, Los Angeles, and Santa Barbara counties. Owned by the City, the center is operated as an Enterprise Fund by the Cultural Affairs Department and consists of the 1,800-seat Fred Kavli Theatre for the Performing Arts and the 394-seat Janet and Ray Scherr Forum Theatre. Over 200,000 patrons and 40,000 children attend more than 250 events annually. AB 8 would impact BAPAC by imposing unreasonable requirements for publicizing or advertising events with varying ticket prices, service fees, and facility fees; prohibiting the restriction of resale tickets to honor artist preferences; reducing venue revenue generated from resale fees; limiting the use of secondary ticket-buyer information; and creating unfair competition by allowing for the exception of nonprofit run venues. This bill does not protect consumers from predatory ticketing services, and instead, unfairly impacts venues and artists while enabling the secondary ticket market. This bill does not limit or address predatory ticket sellers in the secondary market, which purposely create websites similar to the primary contractor in an effort to capitalize on non-discerning ticket buyers and actively engage in price gouging. Rather than strengthening protections for ticket-buyers and event attendees, this bill would protect secondary ticket sellers, at the expense of commercial venues, artists, and end-purchaser ticket holders. The exception for nonprofit-run venues will create unfair competition in the entertainment industry and could lead to artists or events bypassing regional performing arts centers, concert halls, and event venues such as ours, in favor of nonprofit-run venues which would be exempt from these restrictions.”
2. Comments. AXS and LiveNation ask that this bill be held in committee and note that since two bills contain all-in price transparency, “this bill is not necessary and creates technical policy conflicts, confusion, and chaptering issues.” The entities support SB 785 (Caballero) “because it will enact meaningful reforms to the ticketing ecosystem that put consumers and event presenters—the entertainers, teams, venues and labor organizations that create, invest in and deliver live events--first.” They also support that measure because it “does not infringe upon the rights of the teams, entertainers and venues that invest in, create and deliver live events for our fans. It protects the intellectual property rights of those who entertain Californians including the determination of ticket prices and how entertainers choose to sell their tickets, rather than turning those decisions over to third parties who have no skin in the game, little accountability and do nothing to create or enhance our fan experiences.”

StubHub writes that it “believes that a competitive, transparent, and secure ticket marketplace unequivocally supports fans. Competition can drive affordability and an overall better consumer experience. We write in support of Assembly Bill 8 (Friedman), if amended. Recent amendments in the Assembly removed the much-needed comprehensive enhancements to consumer protection statute for ticket sales contained in AB 8. Amendments that remove ticket transfer protections will only harm consumers by limiting competition and access to events in the live entertainment industry. As written, AB 8 no longer goes far enough to protect consumers and bring competition to the live entertainment industry in California… Previous versions of AB 8 required primary sellers to disclose when tickets will be available for sale, how many tickets will be available for sale, and information on how those tickets will be priced. Unfortunately, AB 8 no longer requires primary sellers to provide this critical information to consumers as ticket issuers frequently “holdback” tickets from sale to the public. Specifically, a 2016 report by the Office of the New York Attorney General found that on average, only 46% of tickets go on sale to the public during the initial onsale. The remaining 54% are held back for industry insiders, artists, fan clubs, credit card pre-sales, etc. For top shows, the average number of tickets that go on sale to the public falls to 25%, and in the same report, an example of only 12% of tickets being offered to the public was cited. The practice of holdbacks is unknown by fans, generates a false sense of ticket scarcity, and can stampede fans into over-paying for tickets. Ticket allocation and pricing disclosures that are no longer included in AB 8 provide critical information that can help consumers make informed purchasing decisions… With recent amendments adopted that remove ticket transfer protections, AB 8 no longer contains critical consumer protection provisions that will put our state on par with other pro-consumer states. CA will continue to fall behind. These provisions help foster competition in the live entertainment industry and in doing so provide fans greater access to the events the want to see and greater control over tickets they have rightfully purchased.”

SUPPORT AND OPPOSITION:

Support:

CALPIRG, California Public Interest Research Group (Co-sponsor)

Consumer Federation of California (Co-sponsor)

California Low-income Consumer Coalition
California Association for Micro Enterprise Opportunity
Consumer Federation of America
Consumer Reports
Consumer Watchdog
East Bay Community Law Center
Housing & Economic Right Advocates
Housing and Economic Rights Advocates
Older Women's League Sacramento Capitol

Opposition:

City of Thousand Oaks

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 8

Author:(Friedman and Irwin)

As Amended Ver:April 27, 2023

Majority vote

SUMMARY

This bill makes several changes to the regulations relating to the pricing transparency and transferability of tickets sold for admission to sporting, musical, theatrical, or any other entertainment events.

Major Provisions

1. Requires a ticket seller or ticket reseller who is selling tickets to a cellphone free event to provide a printed ticket for sale, and requires the ticket seller not to charge more for the printed ticket or impose a fee that is more than the fee for a mobile ticket. The bill defines "cell phone free event" as an event in which the organizer prohibits event attendees from retaining possession of their cell phone during the event by collecting and securing their cell phone.
2. Requires a ticket seller to disclose the total cost of a ticket, inclusive of all ancillary fees that must be paid in order to purchase the ticket, and of all service charges, fees, or other surcharges. The total amount is also to be displayed at the point of selection and is not to increase during the purchase process at any point, except that the seller may charge a fee for the delivery of the ticket that is reasonable to the delivery method selected by the purchaser. This fee is to be disclosed prior to the ticket purchaser accepting payment. The ticket seller also is to provide a link that includes refund requirements for ticket sellers.
3. Requires a primary contractor, meaning the person or organization that is responsible for the event for which tickets are being sold, or an agent of that person or organization, not to restrict the resale of tickets in any way. This includes a prohibition on restricting resale of tickets that are a subscription or season pass, denying access to a ticketholder who possesses a resold ticket, or charging a different price for a ticket based on the form or transferability of the ticket. The bill allows a primary contractor to revoke or restrict tickets from a buyer who purchased resold tickets for certain reasons, however, such as violations of venue policies.
4. Restricts a primary contractor from using personally identifiable information to market its products or services to the resale buyer, except in certain situations and with consent of the buyer.
5. Restricts a ticket from being resold for money when the ticket was offered for free initially.

This bill expands the scope of existing provisions regulating ticket sellers and imposes new requirements on ticket sellers and primary contractors, the violation of which would be a crime. Therefore, this bill imposes a state-mandated local program but is not reimbursable.

COMMENTS

Recent events related to online ticket sales for the concerts of several musicians, such as Beyoncé and Taylor Swift, have drawn criticism by consumers and led to a recent hearing in Congress to probe online ticket retail and competition within the ticket market. These criticisms include the unexpected or hidden fees that emerge far along the ticket-buying process and the inability for ticket holders to transfer their tickets to another person, among others.

Among other provisions, this bill contains requirements for ticket retailers to disclose all services charges, fees, and other surcharges at the point of ticket selection. The bill also contains requirements to do with transferability of tickets.

Current law contains various penalties, constituting misdemeanors and fines, to ticket retailers who violate ticket retail law. Specifically, violations are a misdemeanor that can result in a fine or a county jail sentence up to six months. Penalties extend to violations of this bill's provisions.

According to the Author

"Average ticket prices have more than tripled since the mid-'90s, and the fees that are tacked on to each ticket can be as high as 78% of the ticket price. While consumers are certainly feeling the pinch, ticket retailers are doing fine. Just last month Ticketmaster/LiveNation announced record profits, reporting a 2022 operating income up 125 percent from pre-pandemic levels to $732 million, and revenue up 44 percent to $16.7 billion.

"The California laws governing ticket retailers were passed before the internet even existed—a fact that's become exceedingly clear as mega ticket sellers and resellers have used those rules to rip-off consumers eager to see their favorite artists. We need to make sure artists, performers, and venues can reach fans and sell tickets in an easier and more transparent way. We also need to update the law for how tickets are sold today."

Arguments in Support

According to the Consumer Federation of California (CFC) and California Public Interest Research Group (CALPIRG), "AB 8 would achieve a more fair and transparent ticket-buying process for consumers, where the advertised price is the final price. Broad public support for ticket reform exists, and the reforms offered by AB 8 are long overdue. As we emerge from the worst days of the COVID pandemic, Californians are looking for more and more opportunities to enjoy live events. And as people rush to buy tickets for these events, the broken nature of the ticket-selling system is becoming more and more clear."

Arguments in Opposition

According to Live Nation Entertainment, Inc., "AB 8 will regrettably steer more tickets to secondary markets where resellers and brokers get fans' money instead of the artists and venues putting on the show. These secondary markets – unlike the proposed highly regulated primary markets – will have no constraints in how they price tickets, nor in their use of speculative tickets to manipulate supply and demand. More effective policy solutions for controlling costs for California consumers is protecting the right of artists to manage resale and banning the anti-consumer and deceptive practice of speculative ticketing. Unfortunately, as outlined above, AB 8 goes down the wrong path on both and instead prioritizes industrial resellers, the one's responsible for inflating costs for fans."

FISCAL COMMENTS

According to the Assembly Committee on Appropriations:

1. Ongoing cost pressures to the courts of an unknown but likely significant amount to adjudicate the new crimes this bill creates and the civil litigation authorized by this bill. This bill allows the Attorney General, county counsel, or city attorney to bring a civil lawsuit against a violator of its provisions.
2. Ongoing cost pressures, potentially in the hundreds of thousands of dollars to low millions of dollars, for increased incarceration costs. Costs would depend on the number of violations.

California county jails are increasingly overcrowded – particularly since the enactment of the Realignment Act in 2011. Overcrowding has resulted in significant state funding for additional jail construction. Although new crimes are not considered reimbursable state mandates pursuant to Proposition 30 (2012), overcrowding in county jails creates cost pressure on the General Fund because the state has historically granted new funding to counties to offset overcrowding after the 2011 Realignment Act.

VOTES

ASM ARTS, ENTERTAINMENT, SPORTS, AND TOURISM: 5-1-1

YES: Quirk-Silva, Mike Fong, Friedman, Hart, Valencia

NO: Wallis

ABS, ABST OR NV: Lackey

ASM PRIVACY AND CONSUMER PROTECTION: 8-2-1

YES: Gabriel, Bauer-Kahan, Bennett, Irwin, Lowenthal, Papan, Wicks, Wilson

NO: Joe Patterson, Essayli

ABS, ABST OR NV: Vince Fong

ASM APPROPRIATIONS: 11-3-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

NO: Dixon, Mathis, Sanchez

ABS, ABST OR NV: Megan Dahle, Robert Rivas

UPDATED

VERSION: April 27, 2023

CONSULTANT: Brian Anderson / A.,E.,S., & T. / (916) 319-3450 FN: 0000774

Date of Hearing: May 10, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 8

Author:(Friedman) – As Amended Ver:April 27, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill makes several changes to the regulations relating to the pricing transparency and transferability of tickets sold for admission to sporting, musical, theatrical, or any other entertainment events.

Specifically, this bill:

1. Requires a ticket seller or ticket reseller who is selling tickets to a cellphone free event to provide a printed ticket for sale and requires the ticket seller not to charge more for the printed ticket or impose a fee that is more than the fee for a mobile ticket. The bill defines “cell phone free event” as an event in which the organizer prohibits event attendees from retaining possession of their cell phone during the event by collecting and securing their cell phone.
2. Requires a ticket seller to disclose the total cost of a ticket inclusive of all ancillary fees that must be paid in order to purchase the ticket and to all service charges, fees, or other surcharges. The total amount is also to be displayed at the point of selection and is not to increase during the purchase process at any point, except that the seller may charge a fee for the delivery of the ticket that is reasonable to the delivery method selected by the purchaser. This fee is to be disclosed prior to the ticket purchaser accepting payment. The ticket seller also is to provide a link that includes refund requirements for ticket sellers.
3. Requires a primary contractor, meaning the person or organization that is responsible for the event for which tickets are being sold or an agent of that person or organization, not to restrict the resale of tickets in any way. This includes a prohibition on restricting resale of tickets that are a subscription or season pass, denying access to a ticketholder who possesses a resold ticket, or charging a different price for a ticket based on the form or transferability of the ticket. The bill allows a primary contractor to revoke or restrict tickets from a buyer who purchased resold tickets for certain reasons, however, such as violations of venue policies.
4. Restricts a primary contractor from using personally identifiable information to market its products or services to the resale buyer, except in certain situations and with consent of the buyer.
5. Restricts a ticket from being resold for money when the ticket was offered for free initially.

This bill expands the scope of existing provisions regulating ticket sellers and imposes new requirements on ticket sellers and primary contractors, the violation of which would be a crime. Therefore, this bill imposes a state-mandated local program but is not reimbursable.

FISCAL EFFECT:

1. Ongoing cost pressures to the courts of an unknown but likely significant amount to adjudicate the new crimes this bill creates and the civil litigation authorized by this bill. This bill allows the Attorney General, county counsel, or city attorney to bring a civil lawsuit against a violator of its provisions.
2. Ongoing cost pressures, potentially in the hundreds of thousands of dollars to low millions of dollars, for increased incarceration costs. Costs would depend on the number of violations.

California county jails are increasingly overcrowded – particularly since the enactment of the Realignment Act in 2011. Overcrowding has resulted in significant state funding for additional jail construction. Although new crimes are not considered reimbursable state mandates pursuant to Proposition 30 (2012), overcrowding in county jails creates cost pressure on the General Fund because the state has historically granted new funding to counties to offset overcrowding after the 2011 Realignment Act.

COMMENTS:

1. Background. Recent events related to online ticket sales for the concerts of several musicians, such as Beyoncé and Taylor Swift, have drawn criticism by consumers and led to a recent hearing in Congress to probe online ticket retail and competition within the ticket market. These criticisms include the unexpected or hidden fees that emerge far along the ticket-buying process and the inability for ticket holders to transfer their tickets to another person, among others.

Among other provisions, this bill contains requirements for ticket retailers to disclose all services charges, fees, and other surcharges at the point of ticket selection. The bill also contains requirements to do with transferability of tickets.

Current law contains various penalties, constituting misdemeanors and fines, to ticket retailers who violate ticket retail law. Specifically, violations are a misdemeanor that can result in a fine or a county jail sentence up to six months. Penalties extend to violations of this bill’s provisions.

1. Support and Opposition. This bill is supported by various consumer rights advocates, ticketing groups and others. Consumer Federation of California and California Public Interest Research Group (CALPIRG), co-sponsors of this bill write:

AB 8 would achieve a more fair and transparent ticket-buying process for consumers, where the advertised price is the final price Broad public support for ticket reform that has been brewing for the last several years, and these reforms offered by AB 8 are long overdue. As we emerge from the worst days of the COVID pandemic, Californians are looking for more and more opportunities to enjoy live events. And as people rush to buy tickets for these events, the broken nature of the ticket-selling system is becoming more and more clear.

This bill is opposed by various ticketing groups, sports teams, and others. Live Nation Entertainment, Inc., writes:

AB 8 will regrettably steer more tickets to secondary markets where resellers and brokers get fans’ money instead of the artists and venues putting on the show. These secondary markets – unlike the proposed highly regulated primary markets – will have no constraints in how they price tickets, nor in their use of speculative tickets to manipulate supply and demand. More effective policy solutions for controlling costs for California consumers is protecting the right of artists to manage resale and banning the anti-consumer and deceptive practice of speculative ticketing. Unfortunately, as outlined above, AB 8 goes down the wrong path on both and instead prioritizes industrial resellers, the one’s responsible for inflating costs for fans.

1. Related Legislation. SB 785 (Caballero) of this legislative session would establish new categories of ticket sellers, establish requirements for different categories of ticket sellers, and increase penalties for violations of rules governing ticket seller operations. The bill is largely supported by the opponents of this bill and largely opposed by the supporters of this bill. SB 785 is pending in the Senate Appropriations Committee.

Analysis Prepared by: Natasha Collins / APPR. / (916) 319-2081

Date of Hearing: April 25, 2023

ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION

Jesse Gabriel, Chair

ABPCA Bill Id:AB 8 (

Author:Friedman) – As Amended Ver:March 30, 2023

As Proposed to be Amended

SUBJECT: Ticket sellers

SYNOPSIS

This bill proposes to enact three consumer protections for buyers of tickets to sporting, musical, theatrical, and other entertainment events in California.

First, the bill would ensure transparent pricing. Ticket sellers would have to display the total cost of a ticket, including all service charges and fees, before the ticket is selected for purchase. This requirement would put an end to so-called “drip pricing,” in which the initial seat price shown on a ticketing website or app is augmented by fees and surcharges during the purchase process. The bill would similarly prevent the ticket seller from arbitrarily increasing the price of the underlying ticket during the purchase process. These provisions are similar to those in legislation enacted last year in New York.

Second, the bill would end restrictions on the transfer of tickets once they are purchased. Before the advent of the smartphone, people who bought paper tickets to an event could generally give them away or sell them as they saw fit. That freedom has diminished. Electronic tickets often come with restrictions on transfer. A ticket may be completely non-transferable. Or an attendee may have to present their photo ID and the credit card used to purchase the ticket to gain entrance to a venue. In either case, if the original purchaser can no longer attend the event, they have no way to find someone else to go in their place. Even if tickets can be transferred, there may be costs involved. For example, tickets may be required to be resold on the same platform on which they were initially purchased, a transaction for which the platform operator extracts additional fees. This bill would ban such practices.

Third, the bill would require ticket sellers, for cellphone-free events, to provide printed tickets at the same price and for the same fees as charged for electronic tickets. This would enable attendees to avoid the inconvenience of having to check in their phones at such events.

Committee amendments, set forth below, remove a bill provision that has prompted the greatest opposition. It would have required significant disclosure of ticket availability and pricing at an event at least seven days before tickets first go on sale.

This measure is sponsored by Consumer Federation of California and California Public Interest Research Group (CalPIRG). It is supported by seven other nonprofit consumer organizations and four for-profit ticket sellers. The bill is opposed by a variety of ticket sellers and venue operators, including Live Nation Entertainment, a number of California sports franchises, and SAG-AFTRA and other groups representing musicians.

This bill will only be heard by this Committee if it first passes the Assembly Arts, Entertainment, Sports, and Tourism Committee, which is scheduled to hear the bill on the morning of April 25, 2023 (the same date it is scheduled to be heard in the afternoon by this Committee).

SUMMARY: Requires transparent pricing and restriction-free transferability of tickets to sporting, musical, theatrical, or any other entertainment event. Specifically, this bill:

1. Defines the following terms:
   1. “Platform operator” means a person or organization that is responsible for operating a marketplace that enables consumers to purchase, sell, and resell tickets.
   2. “Primary contractor” means the person or organization that is responsible for the event for which tickets are being sold or an agent of that person or organization.
   3. “Ticket seller” means a person who, for compensation, commission, or otherwise, sells or resells admission tickets to a sporting, musical, theatrical, or any other entertainment event—including a primary contractor or a platform operator.
2. Requires a ticket seller to disclose the total cost of a ticket, inclusive of all ancillary fees that must be paid in order to purchase the ticket, including, in a clear and conspicuous manner, the portion of the ticket price, stated in dollars that represents a service charge, fee, or other surcharge.
3. Requires the total amount due for the ticket to be displayed prior to the ticket being selected for purchase. Forbids the price from increasing during the purchase process after it has been selected, except for a delivery charge (reasonable for the method of delivery chosen) that must be disclosed to the purchaser prior to accepting payment.
4. Forbids the disclosure, required under 2), of the portion of the ticket price that represents a service charge, fee, or other surcharge from being false, misleading, or made with an intent to deceive. In particular, the disclosure cannot be presented more prominently or in the same or larger size as the total price.
5. Prohibits a primary contractor from doing any of the following:
   1. Restricting by any means the resale of tickets, including tickets in a subscription or season ticket package.
   2. Denying access to a ticketholder who possesses a resold ticket to an event based solely on the grounds that the ticket was resold.
   3. Employing a paperless ticketing system unless the purchaser is given an option to purchase paperless tickets that the purchaser can transfer at any price, and at any time, and without additional fees, independent of the primary contractor. (An exception, for a method that does not allow for independent transferability, is provided if the purchaser is offered the option of an independently-transferable ticket at the time the ticket was initially purchased.)
   4. Charging a different price for a ticket based on the form or transferability of the ticket.
   5. Using personally identifiable information obtained through a ticket transfer request for any purpose other than to facilitate that transfer. (An exception is provided if a commercial relationship exists between the ticket seller and the platform used to resell the ticket, and the buyer consents to receiving marketing communications from the ticket seller.)
6. Clarifies that nothing in 5) prevents a primary contractor from maintaining and enforcing any policies regarding conduct or behavior at or in connection with the venue, including revoking or restricting tickets for violation of venue policies, such as protection of patrons’ physical safety, addressing fraud or misconduct, or preventing two persons from gaining admission to an event using the same ticket.
7. Defines “cellular phone-free event” as an event in which the organizer prohibits event attendees from retaining possession of their cellular phones during the event by collecting and securing their cellular phones, or by other means.
8. Requires a ticket seller who sells tickets to a cellular phone-free event to provide a printed ticket for sale at the same price and for the same fees as charged for a mobile or electronic ticket.

EXISTING LAW:

1. Defines a “ticket seller” as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event. (Bus. & Prof. Code § 22503.)
2. Clarifies that the following are not ticket sellers for purposes of existing law:
   1. An officially appointed agent of an air carrier, ocean carrier, or motor coach carrier who purchases or sells tickets in conjunction with a tour package.
   2. Any person who sells six tickets or less to any one single event, provided the tickets are sold off the event premises, including, but not limited to, designated parking areas and points of entry to the event.
   3. The person or organization responsible for the event for which tickets are being sold, or a seller of tickets operating under a written contract with this person or organization.
   4. Any nonprofit charitable tax-exempt organization selling tickets to an event sponsored by the organization. (Bus. & Prof. Code §§ 22503.5, 22503.6, 22504, 22511.)
3. Requires that ticket sellers:
   1. Maintain records of ticket sales, deposits, and refunds. (Bus. & Prof. Code § 22501.)
   2. Prior to sale, disclose to the purchaser by means of description or a map the location of the seat or seats represented by the ticket or tickets. (Bus. & Prof. Code § 22502.)
   3. Make any partial or full deposit refundable if received on a future event for which tickets are not available, except for a service charge of not more than 10 percent, until such time as tickets for the event are actually available. (Bus. & Prof. Code § 22506.)
   4. Provide a refund within 30 days for the ticket price of an event that is canceled. (Bus. & Prof. Code § 22507(a).)
   5. Provide a refund, upon request, within 30 days, for the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time. (Bus. & Prof. Code § 22507(b).)
   6. Provide that a local jurisdiction may require a bond of not more $50,000 to cover required refunds. (Bus. & Prof. Code § 22507(d).)
   7. Disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller. (Bus. & Prof. Code § 22508.)
4. Prohibits a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller:
   1. Has lawful possession of the ticket;
   2. Has a contractual right to obtain the ticket; or
   3. Informs the purchaser, in a specified manner, that it does not have possession of the ticket, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price. (Bus. & Prof. Code § 22502.1.)
5. Authorizes a ticket seller to accept a deposit from a prospective purchaser as part of an agreement that the ticket seller will make best efforts to obtain a ticket at a specified price or price range and within a specified time, provided that the ticket seller informs the purchaser, in a specified manner, of the terms of the deposit agreement and makes required disclosures. (Ibid.)
6. Prohibits a ticket seller from representing that it can deliver or cause to be delivered a ticket at a specific price or within a specific price range and fail to deliver the ticket a) within a reasonable time and b) below or within the price and range of prices stated. (Bus. & Prof. Code § 22502.2.)
7. Provides a private right of action to ticket purchasers for violations of 5) and 6). (Bus. & Prof. Code § 22502.3.)
8. Declares it unlawful for a person to intentionally use or sell software or services to circumvent a security measure, access control system, or other control or measure (including limits on the number of tickets a person can purchase) that is used to ensure an equitable ticket buying process for event attendees. (Bus. & Prof. Code § 22502.5)
9. Deems a violation of the chapter of the Business and Professions Code containing the provisions above to be a misdemeanor. (Bus. & Prof. Code § 22505.)
10. Requires a ticket seller to have a permanent business address from which tickets may only be sold and that the address be included in any advertisement or solicitation. Makes a violation of this requirement a misdemeanor punishable by imprisonment or a fine not exceeding $2,500 or by both, and provides for civil penalties of up to $2,500 for violations. (Bus. & Prof. Code § 22500.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: Public frustration with the online ticket-buying experience continues to grow. Recent difficulties in online sales of concert tickets for Beyoncé, Bruce Springsteen, and Taylor Swift drew significant press attention. The U.S. Department of Justice has since opened an antitrust probe into Live Nation Entertainment, which is simultaneously the country’s largest online ticket retailer, an owner of many live entertainment venues, and a manager for numerous touring musicians. (Sisco, DOJ probing Live Nation and Ticketmaster for antitrust violations, Politico (Nov. 18, 2022), available at https://www.politico.com/news/2022/11/18/live-nation-ticketmaster-antitrust-violations-taylor-swift-00069564.) And, on January 24, 2023, the U.S. Senate Judiciary Committee held a hearing, entitled, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” in which Senator Josh Hawley, a Missouri Republican, accused Live Nation of “using [its] monopoly on the front end to create a monopoly in the resale market….” (Mark, Senators on both sides accuse Ticketmaster of misusing its power, Washington Post (Jan. 24, 2023), available at https://www.washingtonpost.com/business/2023/01/24/taylor-swift-ticketmaster-senate-hearing/.)

Whether or not meaningful federal antitrust action is taken against Live Nation, there is much that can be done at the state level to improve the ticketing experience for Californians. This bill is, in part, a response to President Biden’s 2023 call for eliminating junk fees: “hidden or unexpected fees that Americans pay each day that can total hundreds of dollars a month.” (The White House, President Biden Highlights New Progress on His Competition Agenda (Feb. 1, 2023), available at https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/01/fact-sheet-president-biden-highlights-new-progress-on-his-competition-agenda/.) Per the White House, “Junk fees are not only costly to consumers, but they can stifle competition by encouraging companies to use increasingly sophisticated tools to disguise the true price consumers face. By reducing these fees and increasing transparency, we can provide relief to consumers and make our economy more competitive, particularly for new and growing businesses.” (Ibid.)

While there are statutes in the Business and Professions Code that regulate ticket sales, many of the protections offered are antiquated, addressing topics, like the advertised price for event tickets, that made more sense in a pre-Internet world. This bill presents a meaningful attempt to bring these protections up-to-date in a world in which most tickets are purchased online.

1) Author’s statement. According to the author:

Average ticket prices have more than tripled since the mid-‘90s, and the fees that are tacked on to each ticket can be as high as 78% of the ticket price. While consumers are certainly feeling the pinch, ticket retailers are doing fine. Just last month Ticketmaster/LiveNation announced record profits, reporting a 2022 operating income up 125 percent from pre-pandemic levels to $732 million, and revenue up 44 percent to $16.7 billion.

The California laws governing ticket retailers were passed before the internet even existed—a fact that's become exceedingly clear as mega ticket sellers and resellers have used those rules to rip-off consumers eager to see their favorite artists. We need to make sure artists, performers, and venues can reach fans and sell tickets in an easier and more transparent way. We also need to update the law for how tickets are sold today.

We can keep the entertainment industry thriving in California, and protect the consumers at the same time. AB 8 adds important new consumer protections and transparency…. [In particular,] AB 8 will protect all consumers from all types of ticket brokers. Current law only regulates “secondary ticket brokers” but exempts “primary ticket brokers” and doesn’t include secondary ticket sellers or resale platforms.

2) Three key terms, and a note regarding this bill. This bill uses three defined terms that ought to be understood in order to understand what this bill would do.

The first term is “primary contractor.” A primary contractor is the person or entity that is mainly responsible for putting on an event, such as a concert, sporting event, or play, for which tickets are being sold. The primary contractor could be a concert promoter organizing a festival, the venue at which a rodeo will be held, a musician, a sports team, or a theater production company.

The second term is “platform operator.” A platform operator is, generally speaking, an entity that operates an online platform where event tickets are bought and sold, such as Live Nation, SeatGeek, and so forth.

The third and final term is “ticket seller.” A ticket seller is a person or entity that sells or resells tickets to events. Crucially, the term is defined to include both primary contractors and platform operators, so that this bill captures situations when the same entity fills two or three of these roles in the same transaction. For example, the National Football League might organize a playoff game (primary contractor) for which it sells the tickets (ticket seller) on its own app and website (platform operator).

Finally, one note regarding a point that might confuse some readers. The text of the bill in print appears to create an entirely new Chapter, entitled “Ticket Sellers,” in the Business and Professions Code. This is not the case; there is already such a Chapter in the Code, which contains a number of provisions regulating ticket sales. This bill would preserve most of these existing provisions, but merge them with this bill’s new provisions. For example, under this bill, current Business and Professions Code Sections 22503.6, 22504, and 22511 would be merged into a single subdivision, proposed Section 22500(b). Given all of this consolidation, the Office of Legislative Counsel apparently decided the simplest thing to do would be to recodify the existing Chapter in this bill.

3) Consumer protection #1: Transparent pricing. This bill would require tickets sellers to display the total cost of a ticket, including all service charges and fees, before the ticket is selected for purchase. This requirement would put an end to so-called “drip pricing,” in which the initial seat price shown on a ticketing website or app is augmented by fees and surcharges during the purchase process.

As explained by the author:

[T]he bill requires transparent pricing. Don’t you hate it when you go online to buy a ticket to an event and you are told that the ticket price is $50 each, and then you select two tickets and click over to the next page and those 2 tickets that you thought would be $100 are now $130 because of a $15 per ticket “service fee”. One more click to the next page to complete your order, and, adding insult to injury, they tack on another $5 to the cost for an “order processing fee”. Couldn’t they have just told you upfront that the tickets would have cost $135?

AB 8 will require that the full price of a ticket including all fees be provided to the consumer before they put their purchase in their online shopping cart for tickets sold by both primary and secondary ticket sellers. It will also require platforms, both original sale and resale, to disclose an exact location (section, row, seat number) of the tickets.

The bill would similarly prevent the ticket seller from arbitrarily increasing the price of the underlying ticket during the purchase process, apparently in response to reports such as that “[d]uring the recent Springsteen on-sale, fans saw $400 tickets become $5,000 right before their eyes,” (Greene & Millman, Springsteen Fans Raged Over Ticket Prices. Experts Say There’s No Easy Fix, Rolling Stone (Aug. 2, 2022), available at https://www.rollingstone.com/music/music-features/bruce-springsteen-ticket-controversy-1391011/.)

There does not appear to be significant opposition to this fee transparency provision. New York enacted similar legislation in 2022. (Zhan, New York is Finally Making Ticket Prices More Transparent, Vulture (Jun. 30, 2022), available at https://www.vulture.com/2022/06/new-york-senate-bill-s9461-ticket-price-transparency.html.)

4) Consumer protection #2: Ending restrictions on ticket transfers. Before the advent of the smartphone, people who bought paper tickets to an event could generally give them away or sell them as they saw fit.

That freedom has diminished. Electronic tickets often come with any variety of restrictions on transfer. A ticket may be completely non-transferable. Or an attendee may have to present their photo ID and the credit card used to purchase the ticket to gain entrance to a venue. In either case, if the original purchaser can no longer attend the event, they have no way of giving the ticket to a friend or family member, or selling it to someone else who might want to attend. And even if tickets can be transferred, there may be costs involved. For example, tickets may be required to be resold on the same platform on which they were initially purchased, a transaction for which the platform operator extracts additional fees.

This bill would eliminate restrictions on the transfer of tickets once they are purchased. As explained by the author:

AB 8 also provides clarity on the transferability of tickets. […] Consumers are facing an increasing number of restrictions placed on tickets that they have rightfully purchased. For any given event, primary ticket sales are typically done exclusively by one of a handful of large companies. These companies are not only in the primary ticket selling business, most are also in the secondary or resale ticket business as well. Their dominance in the primary market gives them incredible ability to use technology or terms and conditions to dictate to consumers how tickets can be used, whether or not they can be transferred, given away or resold, and on which platforms these transactions can occur.

This unfairly limits consumer choice and competition in the industry. It empowers ticket sellers over consumers. Under AB 8, consumers will be protected from discriminatory, anticompetitive, and deceptive practices that make it harder to buy, resell, and use tickets.

Live Nation, a bill opponent, argues that restrictions on ticket transfer can be pro-consumer:

We now have secure digital ticketing technologies that allow the content creators to manage both the initial (or “primary”) ticket sale and resale. They are broadly utilized in sports; for example, the NFL Ticket Exchange. There is growing use of them in music, where more and more acts are using resale tools and new technology like fan-to-fan face value exchanges to keep ticket prices down and give all fans a fair shot at affordable seats. Pearl Jam pioneered this approach and acts like Queen, The Cure, and Paramore have done the same in recent years. In Washington, DC, this summer, Foo Fighters and dozens of other global stars are appearing at a small 450 seat club with all tickets priced at $44 and made available through a fan lottery. Managed resale–undeniably in the interests of event presenters and fans–is categorically outlawed by AB 8 in its current form. If, for example, a small club in California wanted to sell low priced tickets through a fan lottery, it would be unable to do so. The Cure could not restrict transfers to face value, fan-to-fan exchanges for their California shows.

These examples are notable and heartwarming. But they are not the norm. The norm is for electronic tickets to come with digital restrictions that were not present with paper tickets. It also bears mention that the problems with the sale of Taylor Swift’s concert tickets last fall occurred for people attempting to use Ticketmaster’s “Verified Fan” program, a program of the type described above, “which…is meant to keep tickets in the hands of fans rather than resellers.” (Bowley, Lawmakers Criticize Ticketmaster After Taylor Swift Presale Snags (Nov. 18, 2022), available at https://www.nytimes.com/2022/11/16/arts/music/taylor-swift-ticketmaster-eras-tour.html.)

Opponents raise the possibility that freely-transferrable electronic tickets might empower sellers of fraudulent tickets. Live Nation writes, “The introduction of digital ticketing has greatly eliminated ticket fraud, while increasing safety and venue efficiency…. Turning back the clock on these innovations blocks yet another tool artists and venues use to fight back against scalping.” It is unclear, however, why primary contractors could not provide an online mechanism for a person to verify the authenticity of a ticket; after all, venues are able to verify a ticket’s authenticity when one shows up for an event.

Bill opponents also argue that free transferability would empower secondhand sellers at the expense of musicians, sports teams, and other performers. A coalition consisting of four California sports franchises—the Golden State Warriors, Los Angeles Rams, San Francisco 49ers, and San Jose Sharks—contends:

Preventing the ability to limit resale merely allows the secondary/broker market to buy tickets to flip for a profit, limiting the ability of the average fan to purchase those tickets on the primary market and forcing that fan to pay a markup on the secondary market. Popular performing artists and teams have a vested interest in ensuring that moderately-priced tickets are available to consumers of all economic means at face value and cannot be marked up to the detriment of ordinary consumers. Simply put, stripping event presenters of the ability to control transferability of their tickets directly harms, rather than helps, consumers.

It is difficult to accept the underlying premise of the last sentence: that consumers are well-served by the current system. As Live Nation argues above, some well-meaning musicians or sports teams do indeed provide affordable tickets that are accompanied by digital restrictions preventing transfer or resale for a profit. Again, these cases are the exception, not the norm. Many people, if given the option between (i) a system in which they might get an affordable ticket from a pool made available by their favorite musician or sports team, or (ii) a system in which they are certain the ticket they purchase is priced transparently and is freely-transferable, would probably choose the latter, even if the ticket costs more. Certainty is valuable. TIME recently described Ticketmaster’s “Verified Fan” program as follows: “Although the new system was meant to make the ticket-buying process more streamlined, many fans are saying they are not able to get verified and can’t get tickets to the presale. They either have to find tickets from resellers or just not go at all.” (Mendez, Why Ticketmaster's Verified Fan System Is Giving Taylor Swift Fans a Major Headache—and How to Actually Find Tickets, TIME (Nov. 17, 2022), available at https://time.com/6233959/ticketmaster-taylor-swift-verified-fan/.)

Nothing in this bill prevents primary contractors from pricing tickets at the amount the tickets are worth, and would command, on the open market. If performers are afraid that resellers will mark up tickets and capture profit that should have gone to performers in the first place, they are free (just as they are now) to increase the face value at which they initially sell their tickets.

5) Consumer protection #3: Paper tickets for cellphone-free events. Some venues prevent attendees from bringing cellphones to certain events, perhaps to stop illegal recording or else to prevent disruptions caused by ringing phones. This bill would not require venues to allow cellphones. But it would require ticket sellers, for such events, to provide printed tickets for sale at the same price and for the same fees as charged for electronic tickets. This would enable attendees to avoid the inconvenience of having to check in their phones at such events.

6) Are bots the real issue? Bill opponent AXS Group LLC contends that this bill is misplaced, and that the real issue facing consumers are automated software programs, commonly known as “bots,” that snap up tickets as soon as they are put on sale, far more quickly than any human can. AXS writes:

While purporting to protect fans, AB 8 also misses the opportunity to address existing weaknesses of the law that are not working and being roundly abused.

In 2018, California prohibited the use of a bot to deceive someone in order to incentivize a purchase or sale of goods or services in a commercial transaction. (B&P Code 17941). AB 8 simply provides that is will remain a misdemeanor for a person to intentionally use or sell software or services to circumvent a security measure, access control or other control or measure that is used to ensure an equitable ticket buying process for event attendees. However, simply passing anti-BOT language isn’t enough, as evidenced by the fact that the continued use of BOTS by ticket resellers is rampant. California also needs to take the use of BOTs and other deceptive means seriously, beginning with enforcing laws already on the books. Existing law needs to be amended to protect fan access to tickets in the primary market and address nefarious ticket reseller activity and attach serious penalties that create a meaningful financial disincentive for bad actors engaging in this activity. The current penalties of $2,500 per violation and current enforcement activity are clearly not working. For example, tickets to recent Beyoncé concerts (that were being listed on resale platforms before the tickets had even been priced, created or gone on sale to the public) were being offered for more than $20,000 per ticket. A $2,500 fine would be far less than the $20,000 ticket price (or even the additional $6,400 service fee on the ticket being charged by the reseller) and serves as no meaningful deterrent to the use of BOTS. The punishment must fit the crime in order to have any meaningful disincentive to using BOTS.

Nothing in this bill prevents the author from adding anti-bot provisions; they would likely be perfectly consistent with the bill’s existing provisions. Doing so might strengthen this bill’s consumer protections even further. What is unclear is why reducing the use of bots would render the other provisions of this bill unnecessary. Transparent pricing and transferable tickets are worthwhile and valuable to consumers, irrespective of whether ticket buyers face less competition from bots when buying tickets.

7) Committee amendment—removing the most controversial aspect of this bill. The portion of this bill that has drawn the greatest opposition is a provision requiring primary contractors to disclose, no fewer than seven days before tickets to an event are first put on sale, the total number of tickets to be sold and how they will be priced. This measure appears motivated by concerns that relatively few tickets to highly-desirable events are being offered to the general public, with significant numbers being sold by other means and/or withheld on the initial sale date in order to drive up prices.

California Capitol Venue Coalition, representing independent entertainment venues in Sacramento, explained practical difficulties with this provision:

A venue does not have total control over ticket allotments. The venue can set a maximum on tickets sold in compliance with their legal capacity. Once that capacity is set, the agent (on behalf of the artist) controls prices and allocation. This means that if a certain number of tickets have been allocated to the artists’ official fan club for example, the venue cannot accurately disclose how many tickets are available 7 days prior to the event. This measure would hold the venue accountable as the “Primary Contractor” and therefore the venue will be penalized for something outside of its control.

A coalition of four California sports franchises—the Golden State Warriors, Los Angeles Rams, San Francisco 49ers, and San Jose Sharks—also objected to this provision:

The proposed disclosure within seven days of an event and regulation of ticket holdbacks are impossible to implement and would have severe consequences for certain local and municipal governments, sports teams, entertainers, and concert venues. These provisions would adversely affect existing contractual agreements with tenants and consumers and would decrease seat license sales that are used to pay for the world-class venues located in California. As a second example, concerts may be set well in advance of seven days, but the actual inventory can change on less than seven days’ notice due to stage builds. Because every venue is different and stage designs are hard to adapt, there are often sections of seats that cannot be sold or have to be sold for a cheaper price based on visibility.

In response, Committee amendments would remove this provision, while preserving the bill’s other consumer protections, outlined above:

22505. (a) Not fewer than seven days before the date on which tickets for an event are made available for sale, a primary contractor shall clearly and conspicuously disclose all of the following on both the primary contractor’s internet website and at the box office of the venue where the event will be held:

(1) The total number of tickets that will be offered for sale.

(2) The date or dates on which tickets will be offered for sale.

(3) The number of tickets that will be offered for sale on each date described in paragraph (2).

(4) For each tranche of tickets disclosed pursuant to paragraph (3), how those tickets will be priced, including the number and total cost of tickets that are offered at a set price and the number and range of total cost of tickets that are dynamically priced.

(b) If tickets are not made available for sale more than seven days before the event takes place, a ticket seller shall comply with this section by making the required disclosures at least 24 hours before tickets are made available for sale.

8) Related legislation. SB 785 (Caballero, 2023) would update laws regulating ticket sales by establishing new categories of ticket sellers, establishing requirements for different categories of ticket sellers, and increasing penalties for violations of rules governing ticket seller operations. Status: Senate Judiciary Committee.

SB 829 (Wilk, 2023) would prohibit an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility. Status: Senate Judiciary Committee.

AB 1556 (Friedman, Chap. 180, Stats. 2021) required, for cancelled events, that a refund be made within 30 calendar days of the cancellation. It further required a ticket price at any event which is postponed, rescheduled, or replaced with another event at the same date and time be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request.

AB 1032 (Quirk, Chap. 105, Stats. 2019) bolstered anti-bot provisions enacted by AB 329, described below, by clarifying that “a control or measure used to ensure an equitable ticket buying process” includes limits on the number of tickets that a person can purchase.

AB 329 (Pan, Chap. 325, Stats. 2013) made it a misdemeanor to intentionally use or sell software to circumvent a security measure, access control system, or other control or measure on a ticket seller’s Internet Web site that is used to ensure an equitable ticket buying process.

ARGUMENTS IN SUPPORT: A coalition of nine nonprofit consumer organizations, including bill sponsors CalPIRG and Consumer Federation of California, explains the need for this bill:

Whether purchasing tickets for a concert or sporting event, more and more consumers are finding themselves misled by hidden fees and other unfair tactics that can make it hard to find the true price of a ticket, and faced with limits on consumer control over what they can do with their own ticket once purchased. Transparency is critical to ensure a fair marketplace. Consumers need to know what they are paying for, and how much, up front in order to make informed purchases. Yet ticket sellers have gotten away with including hidden fees, unclear seat location information, and murky refund policies for many of their ticket sales. By not revealing the full price of the ticket—including fees—upfront, ticket vendors are misleading consumers and trying to make comparison shopping more difficult, frequently requiring them to pay fees that are up to 27-30% more than the advertised price.

ARGUMENTS IN OPPOSITION: AXS Group LLC argues against free transferability of tickets on the grounds that this feature will benefit resellers, not consumers:

Teams, artists and venues (not ticket brokers and resale platforms) who produce and present the entertainment events are the parties best situated to determine how tickets to their events (which are their intellectual property, their physical property, and their investment, not the brokers or resellers) may be sold. Moreover, rather than benefit consumers, AB 8 will simply expose them to price gouging and prevent the use of technologies designed to provide fans access to face value tickets and technologies allowing for face value transfer. When a reseller thinks of ticket pricing, they only have profit in mind. When artists think of ticket pricing, it is the fan who is front and center.

REGISTERED SUPPORT / OPPOSITION:

Support

California Public Interest Research Group (CalPIRG)(co-sponsor)

Consumer Federation of California (co-sponsor)

California Association for Micro Enterprise Opportunity (CAMEO)

California Low-income Consumer Coalition

Consumer Federation of America

Consumer Reports

Consumer Watchdog

East Bay Community Law Center

Housing and Economic Rights Advocates

Seatgeek

Stubhub, Inc.

Tickpick

Vivid Seats LLC

Opposition

AXS Group LLC

Bay Area Council

Black Music Action Coalition

California Capitol Venue Coalition

Future of Music Coalition

Golden State Warriors

Live Nation Entertainment, Inc.

Los Angeles Angels

Los Angeles Dodgers LLC

Los Angeles Rams

Music Artists Coalition

Music Workers Alliance

National Independent Venue Association of California (NIVA-CA)

Oakland Athletics

Recording Academy

SAG-AFTRA

San Diego Padres

San Francisco Baseball Associates LLC (dba San Francisco Giants)

San Francisco Forty Niners

San Jose Sharks

Songwriters of North America

Union of Musicians and Allied Workers

Analysis Prepared by: Jith Meganathan / P. & C.P. / (916) 319-2200

Date of Hearing: April 25, 2023

ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, AND TOURISM

Sharon Quirk-Silva, Chair

ABPCA Bill Id:AB 8 (

Author:Friedman) – As Amended Ver:March 30, 2023

SUBJECT: Ticket sellers

SUMMARY: Revises regulations relating to the pricing transparency and transferability of tickets sold for admission to sporting, musical, theatrical, or any other entertainment events.

Specifically, this bill:

1. Defines a “ticket seller” to mean a person who, for compensation, commission, or otherwise, sells or resells admission tickets to a sporting, musical, theatrical, or any other entertainment event, including a primary contractor or a platform operator.
2. Defines a “primary contractor” to mean the person or organization that is responsible for the event for which tickets are being sold or an agent of that person or organization.
3. Defines a “platform operator” means a person or organization that is responsible for operating a marketplace that enables consumers to purchase, sell, and resell tickets.
4. Makes it unlawful for a ticket seller to contract for the sale of tickets, or accept consideration for payment in full or for a deposit for the sale of tickets, unless the ticket seller meets one or more of the following requirements:

a) The ticket seller has the ticket in their possession.

b) The ticket seller has a written contract to obtain the offered ticket at a certain price from a person in possession of the ticket or from a person who has a contractual right to obtain the ticket from the primary contractor.

c) The ticket seller informs the purchaser orally at the time of the contract or receipt of consideration, whichever is earlier, and in writing within two business days, that the seller does not have possession of the ticket, has no contract to obtain the offered ticket at a certain price from a person in possession of the ticket or from a person who has a contractual right to obtain the ticket from the primary contractor, and may not be able to supply the ticket at the contracted price or range of prices.

1. States that a ticket seller is not prohibited from accepting a deposit from a prospective purchaser as part of an agreement that the ticket seller will make best efforts to obtain a ticket at a specified price or price range and within a specified time, provided that the ticket seller informs the purchaser orally at the time of the contract or receipt of consideration, whichever is earlier, and in writing within two days, of the terms of the deposit agreement, and includes in the oral and written notice the disclosures otherwise required.
2. Requires ticket sellers to disclose to the purchaser, by means of description or a map, the location of the seat or seats represented by the ticket or tickets prior to sale.
3. Requires ticket sellers to disclose service charges imposed by the ticket seller, added to the actual ticket price by the seller, in any advertisement or promotion for any event by the ticket seller.
4. Requires ticket sellers to disclose the total cost of a ticket, inclusive of all ancillary fees that must be paid in order to purchase the ticket, including, in a clear and conspicuous manner, the portion of the ticket price, stated in dollars, that represents a service charge, fee, or other surcharge. Additionally:
   1. Disclosure of a subtotal, fee, charge, or other component of the total price must not be false or misleading or made with an intent to deceive, and must not be presented more prominently or in the same or larger size as the total price.
   2. The total amount due for the ticket must be displayed prior to the ticket being selected for purchase and must not increase during the purchase process at any point after the ticket has been selected by the purchaser, except that the ticket seller may charge a fee for the delivery of the ticket that is reasonable to the delivery method selected by the purchaser and is required to be disclosed to the purchaser prior to accepting payment.
5. Requires ticket sellers to provide a link to an internet web page that includes the refund requirements for ticket sellers.
6. Requires a primary contractor, not fewer than seven days before the date on which tickets for an event are made available for sale, to clearly and conspicuously disclose all of the following on both the primary contractor’s internet website and at the box office of the venue where the event will be held:
7. The total number of tickets that will be offered for sale.
8. The date or dates on which tickets will be offered for sale.
9. The number of tickets that will be offered for sale on each date.
10. How those tickets will be priced, including the number and total cost of tickets that are offered at a set price and the number and range of total cost of tickets that are dynamically priced.
11. Requires that if tickets are not made available for sale more than seven days before the event takes place, ticket sellers will comply with this section by making the required disclosures at least 24 hours before tickets are made available for sale.
12. Prohibits a primary contractor from restricting by any means the resale of tickets, including tickets in a subscription or season ticket package, and from denying access to a ticketholder who possesses a resold ticket to an event based solely on the grounds that the ticket was resold.
13. States that this section does not prevent a primary contractor from maintaining and enforcing any policies regarding conduct or behavior at or in connection with the venue. A primary contractor may revoke or restrict tickets for reasons relating to violation of venue policies, other than policies restricting or prohibiting ticket resale, including, but not limited to, attempts by two or more persons to gain admission to a single event with both the canceled tickets originally issued to the purchaser and those tickets reissued as part of a resale transaction and to the extent the primary contractor deems necessary for the protection of the physical safety of patrons or to address fraud or misconduct.
14. Requires ticket sellers to have a permanent business address from which tickets may only be sold. That address must be included in any advertisement or solicitation and be duly licensed as may be required by any local jurisdiction. A violation of this section constitutes a misdemeanor punishable by imprisonment in a county jail not exceeding six months, or by fine not exceeding $2,500, or by both. A person who engages, has engaged, or proposes to engage in a violation of this section will be liable for a civil penalty not to exceed $2,500 for each violation. Each ticket sold or offered for sale in violation of this section shall constitute a separate violation.
15. Requires a ticket seller who is selling tickets to a cellular phone-free event to provide a printed ticket for sale. A ticket seller who is selling tickets to a cellular phone-free event shall not charge more for a printed ticket, or impose a fee that is more than the fee for a mobile or electronic ticket.
16. Prohibits a person from intentionally using or selling software or services to circumvent a security measure, access control system, or other control or measure that is used to ensure an equitable ticket buying process for event attendees.

EXISTING LAW:

1. Defines a ticket seller as any person who for compensation, commission, or otherwise sells admission tickets to sporting, musical, theatre, or any other entertainment event. Clarifies that the following are not a ticket seller subject to various requirements (Business and Professions Code (BPC) Sections 22503.6, 225034, and 22511):
   1. An officially appointed agent of an air carrier, ocean carrier or motor coach carrier who purchases or sells tickets in conjunction with a tour package accomplished through the primary event promoter or his or her agent by written agreement.
   2. Any person who sells six tickets or less to any one single event, provided the tickets are sold off the premises where the event is to take place, including, but not limited to, designated parking areas and points of entry to the event.
   3. Any primary contractor (defines as the person or organization responsible for the event for which tickets are being sold) or seller of tickets for the primary contractor operating under a written contract with the primary contractor.
   4. Any nonprofit charitable tax-exempt organization selling tickets to an event sponsored by the organization.
2. Establishes various requirements for ticket sellers, a violation of which constitutes a misdemeanor, including that they (BPC 22500 – 22511):

• 1. Have a permanent business address from which tickets may only be sold and that the address be included in any advertisement or solicitation, a violation of which constitutes a misdemeanor punishable by imprisonment or a fine not exceeding $2,500 or by both. Provides that a person who engages, has engaged, or proposes to engage in a violation of this specific requirement is liable for a civil penalty not to exceed $2,500 for each violation.
  2. Maintain records of ticket sales, deposits, and refunds.
  3. Prior to sale, disclose to the purchaser by means of description or a map the location of the seat or seats represented by the ticket or tickets.
  4. Make any partial or full deposit received on a future event for which tickets are not available refundable, except for a service charge of not more than 10 percent until tickets for the event are actually available.
  5. Disclose that a service charge is imposed by the ticket seller and is added to the actual ticket price by the seller in any advertisement or promotion for any event by the ticket seller.
  6. Provide a refund within 30 days for the ticket price of an event which is canceled.
  7. Provide a refund, upon request, within 30 days, for the ticket price of an event which is postponed, rescheduled, or replaced with another event at the same date and time.
  8. Provide a bond of not more $50,000 to provide for any refunds in a local jurisdiction that requires this.
  9. Disclose in any advertisement or promotion for any event that a service charge is imposed and added to the actual ticket price.

1. Prohibits a ticket seller from contracting to sell or accepting payment for tickets unless the ticket seller has lawful possession of the ticket; has a contractual right to obtain the ticket; or informs the purchaser the seller does not have possession of the tickets, has no contract to obtain the offered ticket, and may not be able to supply the ticket at the contracted price, as specified. Authorizes a ticket seller to accept a deposit from a prospective purchaser as part of an agreement that the ticket seller will make best efforts to obtain a ticket at a specified price or price range and within a specified time, provided that the ticket seller informs the purchaser orally at the time of the contract or receipt of consideration, whichever is earlier, and in writing within two days, of the terms of the deposit agreement, and includes in the oral and written notice other required disclosures. (BPC 22502.1)
2. Prohibits a ticket seller from representing that they can deliver or cause to be delivered a ticket at a specific price or within a specific price range and fail to deliver within a reasonable time at or below or within the price and range of prices stated. Specifies that a ticket seller who violated this prohibition and violates 3) above is civilly liable to the ticket purchaser for two times the contracted price of the ticket, in addition to any sum expended in trying to attend the event, and reasonable attorney’s fees and court costs. (BPC 22052.2 and 22052.3)

FISCAL EFFECT: Unknown. This measure has been keyed fiscal by the Legislative Counsel.

COMMENTS:

1. Author’s statement. According to the author, “Average ticket prices have more than tripled since the mid-‘90s, and the fees that are tacked on to each ticket can be as high as 78% of the ticket price. While consumers are certainly feeling the pinch, ticket retailers are doing fine. Just last month Ticketmaster/LiveNation announced record profits, reporting a 2022 operating income up 125% from pre-pandemic levels to $732 million, and revenue up 44% to $16.7 billion.

“The California laws governing ticket retailers were passed before the internet even existed - a fact that's become exceedingly clear as mega ticket sellers and resellers have used those rules to rip-off consumers eager to see their favorite artists. We need to make sure artists, performers, and venues can reach fans and sell tickets in an easier and more transparent way. We also need to update the law for how tickets are sold today.

“We can keep the entertainment industry thriving in California, and protect the consumers at the same time. AB 8 adds important new consumer protections and transparency in three key ways.

“First, AB 8 will protect all consumers from all types of ticket brokers. Current law only regulates ‘secondary ticket brokers’ but exempts ‘primary ticket brokers’ and doesn’t include secondary ticket sellers or resale platforms.

“Next, the bill requires transparent pricing. Don’t you hate it when you go online to buy a ticket to an event and you are told that the ticket price is $50 each, and then you select two tickets and click over to the next page and those two tickets that you thought would be $100 are now $130 because of a $15 per ticket ‘service fee’. One more click to the next page to complete your order, and, adding insult to injury, they tack on another $5 to the cost for an ‘order processing fee’. Couldn’t they have just told you upfront that the tickets would have cost $135?

“AB 8 will require that the full price of a ticket including all fees be provided to the consumer before they put their purchase in their online shopping cart for tickets sold by both primary and secondary ticket sellers. It will also require platforms, both original sale and resale, to disclose an exact location (section, row, seat number) of the tickets.

“Last but not least, AB 8 also provides clarity on the transferability of tickets. In today’s market place, consumers are often in the dark about their options if they can’t attend an event. Can you get a refund? No. Can you resell them? Maybe, or maybe not. Can you give them away for free? Maybe, or maybe not.

“Consumers are facing an increasing number of restrictions placed on tickets that they have rightfully purchased. For any given event, primary ticket sales are typically done exclusively by one of a handful of large companies. These companies are not only in the primary ticket selling business, most are also in the secondary or resale ticket business as well. Their dominance in the primary market gives them incredible ability to use technology or terms and conditions to dictate to consumers how tickets can be used, whether or not they can be transferred, given away or resold, and on which platforms these transactions can occur.

“This unfairly limits consumer choice and competition in the industry. It empowers ticket sellers over consumers. Under AB 8, consumers will be protected from discriminatory, anticompetitive, and deceptive practices that make it harder to buy, resell, and use tickets.”

1. Background. On November 18, 2022, tickets were scheduled to go on sale for singer and songwriter Taylor Swift’s Eras Tour. Pre-sale for tickets for select fans with certain corporate partnerships began as early as November 1, 2022. On November 15, during presale, Ticketmaster’s website crashed when millions of people attempted to buy Swift’s concert tickets. After Ticketmaster determined there were at least questions as to whether there were enough tickets to meet buyer demand, Ticketmaster also cancelled its general ticket sale that was supposed to open on November 18, 2022. This meant that fans who otherwise would have paid hundreds of dollars to see Swift in concert were left to purchase them off of resale websites, where they were going for thousands of dollars (some even around $20,000).

Following public outcry the Justice Department opened an antitrust investigation into Ticketmaster, who merged with Live Nation Entertainment back in 2010. For her own part, Swift criticized the situation on social media, sharing with fans that she and her team asked multiple times if Ticketmaster could handle the demand of her fan base, and the company assured her it could.

On Tuesday, January 24, 2023, the US Senate Judiciary Committee had a hearing on the issue, focusing specifically on the Live Nation and Ticketmaster’s 2010 merger. Senators questioned Live Nation and raised potential solutions to the problems above, including non-exclusivity of contracts between venues and ticketing agents, placing price caps on tickets, and working more closely with the Fair Trade Commission to stop speculative ticket sales. National media has been following the story since October and November of 2022.

1. Common issues with ticket purchasing. Additional or hidden fees are typically included in the price for tickets to live events. A strategy known as “drip pricing” allows sellers to advertise a deceptively low price that lures in consumers, revealing the full cost including mandatory surcharges only once the consumer is on the verge of completing the transaction.

Drip pricing has no legitimate business purpose and harms consumers. The practice leads people to spend more money than they would if the full price were communicated upfront. While consumers can in theory walk away once the true price is revealed, studies show that many complete such transactions, given the time and effort that they have already invested. Even for consumers who abandon a transaction, drip pricing wastes time and severely complicates efforts to compare the actual prices of competing offers.

Consumers are facing an increasing number of restrictions placed on tickets that they have rightfully purchased. For any given event, primary ticket sales are typically done by one of a handful of large companies exclusively. These companies are not only in the primary ticket selling business, most are also in the secondary or resale ticket business as well. Their dominance in the primary market, gives them incredible ability to use technology or terms and conditions to dictate to consumers how tickets can be used, whether or not they can be transferred, given away or resold, and on which platforms these transactions can occur.

Ticket issuers and primary ticket platforms are increasingly using anticompetitive tactics to control the lifecycle of a ticket from start to finish. These include issuing paperless and other non-transferable tickets or requiring photo ID and the original credit card used for purchase to gain venue entry. These restrictions limit competition, increase prices, and hinder fans’ ability to buy, resell, or give away tickets as they choose.

Tickets are often purchased several months in advance of the event and, in most cases, buyers are not able to return or exchange tickets if they can no longer able to attend. Some ticket businesses, sports team owners, artists, and venues use burdensome delivery techniques to make it difficult, if not impossible, for the original purchaser to freely transfer the ticket. These restrictions limit fans’ ability to: 1) resell a ticket if they cannot attend an event, 2) buy tickets as gifts, 3) Give tickets away to friends or family or 4) Donate tickets to charitable causes.

The precise manner in which tickets are distributed, to industry insiders through holds, to non-public groups through pre-sales, and to the general public through public on-sales, is rarely, if ever, disclosed to the public. This information vacuum leads to mistrust from consumers, who feel like the system is fixed against them.

Currently, huge percentages of tickets are not actually offered for sale to the general public, instead set aside for various affinity groups, or simply kept back to keep supply at a perceived low amount to justify price surging systems like “dynamic” and “platinum” tickets. A 2016 report by the New York Attorney General’s office found that more than 50% of tickets to concerts were held back from general sale, with many concerts seeing far higher percentages, an audit by the Honolulu, Hawaii government in 2020 showed one concert that had a 93% of tickets held back. Holdbacks once again harm consumers as they create a false sense of demand, artificially inflating prices, leading to resell platforms where they are more than likely to spend above face value for a ticket.

1. Arguments in support. According to co-sponsors of the bill, the California Public Interest Research Group (CALPIRG) and Consumer Federation of California, “Whether purchasing tickets for a concert or sporting event, more and more consumers are finding themselves misled by hidden fees and other unfair tactics that can make it hard to find the true price of a ticket, and faced with limits on consumer control over what they can do with their own ticket once purchased. Transparency is critical to ensure a fair marketplace. Consumers need to know what they are paying for, and how much, up front in order to make informed purchases. Yet ticket sellers have gotten away with including hidden fees, unclear seat location information, and murky refund policies for many of their ticket sales. By not revealing the full price of the ticket, including fees, upfront, ticket vendors are misleading consumers and trying to make comparison shopping more difficult, frequently requiring them to pay fees that are up to 27-30% more than the advertised prize.

“Consumers should know how much a ticket costs from the first, advertised listing price, not after clicking through several screens. Consumers also should know how many tickets are actually available for purchase. Ticket sellers have been known to hold back ticket sales to create the sense tickets will sell-out sooner than they actually will, which can artificially drive up prices.

“In addition to proper transparency, consumers also deserve control over their ticket after they purchase it and should be able to decide how to use, sell or give away their tickets if they wish. Unfortunately, ticket sellers currently can prevent ticket owners from reselling tickets through any site besides their own. Once you buy a ticket, it should be yours to do with as you please.

“Broad public support for ticket reform that has been brewing for the last several years, and these reforms offered by AB 8 are long overdue. As we emerge from the worst days of the

COVID pandemic, Californians are looking for more and more opportunities to enjoy live events. And as people rush to buy tickets for these events, the broken nature of the ticket-selling system is becoming more and more clear.”

1. Arguments in opposition. According to Live Nation Entertainment, “Live Nation Entertainment strongly opposes Assembly Bill 8, a bill with good intentions but which would hurt consumers, make it impossible for artists, teams, and venues to protect their fans, and principally advances the interests of professional ticket resellers and the secondary marketplaces such as StubHub and Vivid Seats that accept and even encourage ticket scalping.

“Speculative ticketing is the serious and harmful practice of selling tickets the offeror does not yet possess. It is a scalping technique, used to exploit the initial excitement around show announcements and lock fans in to purchase contracts at high prices. It is a tool of the shadiest of scalpers and brokers who will not hesitate to make false disclosures and then disappear. Often these ‘spec tickets’ are put up for sale on secondary services before the original onsale. These sales are deeply harmful to consumers who believe they have bought a real ticket but, if the spec seller fails to deliver, end up with nothing but an often worthless claim for a refund and a huge amount of disappointment and unrecoverable losses for travel or other expenses.

“A recent, typical example of this practice occurred when Beyoncé announced her Renaissance tour, with stops at SoFi Stadium in Inglewood and Levi’s Stadium in Santa Clara. Within minutes of the tour being announced and a week before the event actually went on sale, tickets were popping up on resale platforms for thousands of dollars, some for more than $22,000. These tickets did not yet exist, and those offering them didn’t possess them or have the ability to promise a specific seat to a buyer.

“Teams, artists, and venues who produce and present events must be able to set prices and structure ticket sales in ways that honor their relationship with their fans and strike the right balance between affordability and meeting demand. In live entertainment, it is very common, the norm, even, for artists to underprice their tickets to make them more affordable. Unfortunately, when they do so they invite scalping, which in the age of StubHub, SeatGeek and Vivid Seats occurs at an industrial scale.”

1. Double-referral. Should the bill pass out of this committee, it will be re-referred to the Assembly Committee on Privacy and Consumer Protection.
2. Amendments and suggestions. Due to legislative scheduling and deadlines, amendments to this bill will be processed by the Assembly Committee on Privacy and Consumer Protection rather than this committee. The Authors have agreed to remove section 22505 (numbers 10 and 11 of the provisions of the bill listed above) relating to seven day pricing, ticket holdbacks, and inventory disclosure.

According to opponents of the bill, bot attacks are a serious problem and the fines for getting caught are minor compared to the profits they are receiving from reselling tickets to high-profile events. Moving forward, the authors may want to consider amending the bill to impose higher fines for this type of activity to act as a better deterrent, or adding a requirement on ticket sellers to report bot attacks to the State Attorney General.

1. Prior and related legislation:
   1. SB 785 (Caballero), of 2023, would update laws regulating ticket sellers by establishing new categories of ticket sellers, establishing various requirements for certain types of ticket sellers, and increasing penalties for violations of rules governing ticket seller operations. The bill also prohibits a certain type of ticket seller from advertising or selling or accepting payment for a ticket sale prior to the ticket being available by the event presenter, unless authorized to sell by the event presenter. Additionally, it increases penalties for violations of certain requirements and prohibits event presenter likeness from being used on any website. (Status: The bill is currently in the Senate Committee on Judiciary.)
   2. SB 829 (Wilk), of 2023, would prohibit an exclusivity clause in a contract between a ticket seller and primary entertainment facility operator, where the primary ticket seller is the exclusive ticket seller for the operator of the entertainment facility. (Status: The bill is currently in the Senate Committee on Judiciary.)
   3. AB 1556 (Friedman), Chapter 180, Statutes of 2021, requires, for cancelled events, that a refund be made within 30 calendar days of the cancellation. Requires a ticket price at any event which is postponed, rescheduled, or replaced with another event at the same date and time be fully refunded to the purchaser by the ticket seller upon request within 30 calendar days of the refund request.
   4. SB 1001 (Hertzberg), Chapter 892, Statutes of 2018, prohibits a person from using of a bot to communicate or interact with another person in California online with intent to mislead the other person about its artificial identity for the purpose of knowingly deceiving the person about the content of the communication in order to incentivize a purchase or sale of goods or services in a commercial transaction or to influence a vote in an election.
   5. AB 329 (Pan), Chapter 325, Statutes of 2013, made it a misdemeanor to intentionally use or sell software to circumvent a security measure, access control system, or other control or measure on a ticket seller’s Internet Web site that is used to ensure an equitable ticket buying process.

REGISTERED SUPPORT / OPPOSITION:

Support

Consumer Federation of California (Co-Sponsor)

California Public Interest Research Group – CALPIRG (Co-Sponsor)

California Low-income Consumer Coalition

Cameo - California Association for Micro Enterprise Opportunity

Consumer Federation of America

Consumer Reports

Consumer Watchdog

East Bay Community Law Center

Housing and Economic Rights Advocates

Seatgeek

Stubhub, INC.

Tickpick

Vivid Seats LLC

Opposition

AXS Group LLC

Bay Area Council

Black Music Action Coalition

California Capitol Venue Coalition

Future of Music Coalition

Golden State Warriors

Live Nation Entertainment, INC.

Los Angeles Rams

Music Artists Coalition

Music Workers Alliance

National Independent Venue Association of California (NIVA-CA)

Recording Academy

SAG-AFTRA

San Francisco Forty-Niners

San Jose Sharks

Songwriters of North America

Union of Musicians and Allied Workers

Analysis Prepared by: Brian Anderson / A.,E.,S., & T. / (916) 319-3450