The FTC Better Online Ticket Sales Act (“BOTS Act” or the “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 BOTS Act applies to event tickets for public concerts, theater performances, sporting events, and similar activities at venues with seating capacity of over 200.
The BOTS Act is intended to provide consumers with a defense against ticket bots – software that could buy up big blocks of tickets faster than consumers could type and click. The policy? To ensure that consumers had equitable access to tickets.
The first BOTS Act cases were settled in 2021.
The FTC cases named New York-based defendants. FTC attorneys alleged that the defendants bought thousands of tickets from Ticketmaster’s websites and then resold them, raking in big profits. According to the FTC, despite security measures Ticketmaster implemented to limit how many tickets a person could buy and to enforce its posted online sales rules, the defendants allegedly used ticket bots to circumvent the system and covered their tracks with other illegal tactics.
For example, the complaints alleged the defendants used various bots that would automatically reserve any tickets that fit their search criteria, effectively blocking anyone else from buying the tickets at least until the reservation clock expired. The bot also would allegedly bypass any of those CAPTCHAs designed to make sure the buyer is a real person. By using bots, the defendants were purportedly able to buy multiple tickets across multiple Ticketmaster accounts within seconds, effectively freezing out consumers who honored the rules.
To evade detection, the defendants allegedly used thousands of different IP addresses, as well as hundreds of fictitious names and addresses and hundreds of different credit card accounts. The FTC charged the defendants with violating both the BOTS Act and the FTC Act.
The settlements included that when buying event tickets, the defendants must stop using bots, CAPTCHA bypass services, fictitious identities, multiple IP addresses simultaneously on a single device, and credit cards in the names of anyone other than themselves or their employees. One of the orders pertaining to a corporate entity and its owner imposed a$16 million civil penalty that was suspended upon the payment of $1.565 million. Another order relating to a corporate entity and its owner imposes a $4.4 million judgment, suspended upon the payment of $499,147. Another corporate entity was required to pay$1.642 million with the rest of the $11.2 million judgment suspended. All three judgments were partially suspended based on the defendants’ ability to pay.
Following the initial enforcement scrutiny, in 2023 expanded federal ticketing legislation was introduced. The Unlock Ticketing Markets Act (S. 1326) is designed to prohibit exclusive contracts between a primary ticketer and a venue that are used by Ticketmaster to curtail competition by competing ticketing platforms for primary sales and resales. Another bill, the Fans First Act (S. 3457) would, in part, purportedly help address flaws in and imposes reforms to the current live event ticketing system by increasing transparency in ticket sales. The First Fan Act was introduced by Senators Amy Klobuchar and John Cornyn (R-TX), along with various co-sponsors. Those that criticize the First Fan Act believe that the proposed legislation would actually provide Ticketmaster with more power.
Consult with a seasoned FTC compliance attorney if you or your company have received an FTC civil investigative demand (“CID”), a subpoena from a state attorney general, or if you or company has/have been named in a state or federal enforcement lawsuit.
Takeaway: Violating the BOTS Act can lead to investigation and enforcement. The Act also aims to protect consumers from price gouging on the secondary market. How a respondent or defendant does it is not as important as whether there is an act of circumventing “a security measure, access control system, or other technological control or measure . . . the ticket seller has put in place” that violates the BOTS Act. The BOTS Act does not specifically require a technological solution to circumvent purchase limits, rather, it prohibits any means of bypassing these limits. Ticket purchasers that evade ticket limits by using fictitious identities, multiple credit cards or multiple spoofed IP addresses on the same device may be in violation of the BOTS Act, even if they do not use ticket bots. Furthermore, as these cases demonstrate, BOTS Act violations may result in corporate and individual liability. Additionally, serial violations are looked upon with disfavor. Before the enactment of the BOTS Act, the settling defendants all had signed Assurances of Discontinuance with the New York Attorney General relating to, among other things, their use of ticket bots. Importantly, the FTC and the State Attorneys General share enforcement authority under the BOTS Act. The BOTS Act also addresses more than just using bots to circumvent sellers’ security systems. Although not alleged in the cases the FTC just brought, the BOTS Act makes it illegal to sell tickets obtained in violation of the statute if the seller participated in the illegal purchase or knew or should have known the tickets were acquired in violation of the law.
