Wednesday, 26 March 2014
Economics References Committee; Report
I present the report of the Economics References Committee on ticket scalping together with the Hansard record of proceedings and documents presented to the committee.
Ordered that the report be printed.
That the Senate take note of the report.
Ticket scalping is not new but the advent and growing importance of the internet, which facilitates the convenient online sale of tickets, has opened up access to a much wider secondary market. Online secondary ticket platforms, such as eBay, Gumtree and, more recently, viagogo, dominate this marketplace, providing a framework in which ticket resellers operate.
This onselling of event tickets helps consumers and suppliers by offering more access to tickets, easy transfers and improved ticket sales. Those with a genuine reason for reselling, as well as rent seekers chasing a profit, tend to use this online secondary market to resell their tickets—thus, this market opens up opportunities for unscrupulous ticket resellers to exploit consumers.
The committee found that, without doubt, the activities of ticket scalpers pose problems for event holders and their promoters but, more importantly, for consumers who may pay inflated prices for their tickets, have their tickets cancelled and be denied entry to the event or fall prey to a fraudster and not receive the tickets at all. A number of submitters were of the view there were practices in the primary market that undermined consumer confidence in the efficiency and fairness of the market. It also fostered conditions that encouraged ticket scalping or disadvantaged the consumer. These included practices such as: corporate and hospitality packages, where a consumer is forced into a position of having to buy a packaged deal that includes non-optional extras—usually overpriced—such as a breakfast, when they only want to purchase a ticket; pre-sale and sponsorship deals, where the number of tickets available to the general public are restricted because of priority agreements with partners; bulk purchases, where individuals or groups are able to purchase a large number of tickets and then onsell them in the secondary market, often at highly inflated prices; poor timing of ticket sales, a common practice where tickets are dumped on the market, usually at 9 am on a Monday morning, causing phone lines and internet sites to collapse under the pressure; and limited rights to refunds or transfers, where a consumer who is no longer able to attend the event has no legitimate avenue in which to receive a refund for the ticket.
Promoters and event holders were of the view that the problems identified in the primary market could or were being addressed, especially by imposing caps on the number of tickets allocated for sponsors and on individual purchasers. Even so, the committee was of the view that much more could be done in the primary market to deny scalpers the opportunity to resell tickets at inflated or exorbitant prices. Rather than problems in the primary market, some witnesses questioned the conduct of those operating in the secondary market which, in their view, caused significant problems for consumers.
As the most obvious and effective measure to tackle the problem of ticket scalping, the witnesses favoured action that would prohibit online market places, such as eBay, from allowing scalping. For example, one submitter wanted 'far greater controls in place to restrict the activities of scalpers'. They suggested that operators such as eBay cease allowing tickets to be scalped. Such action included withdrawing tickets with unreasonable write-ups—that is, cancelling scalpers' eBay account and/or their Ticketek or Ticketmaster account. However, evidence overwhelmingly recognised the legitimate need for having a resale market. It placed a heavy emphasis on the fact that this secondary market was safe, secure and reliable.
Both the ticketing agencies and the resellers indicated that they were putting in place measures to ensure the secondary market would protect consumers from dishonest or unfair practices. Indeed, event holders and promoters have entered or are intending to enter this market with the emphasis on providing not only a safe and secure place but also a lawful market.
Despite the efforts of those engaged in the primary and secondary markets to remove the incentive for ticket scalpers to profiteer at the expense of consumers, some state governments have responded to such concerns by introducing legislation within their own jurisdictions. Each state, however, has taken its own approach to stop people profiteering from the resale of tickets. In this regard, evidence highlighted the inconsistency in the approaches taken by the states as well as the difficulty enforcing legislation outside their respective jurisdictions. Some witnesses took the view that the legislation was generally futile and ineffective.
While unconvinced about the effectiveness of state based legislation in curbing ticket scalping, some witnesses saw an important role for the Commonwealth. They cited the Australian Consumer Law—a national, generic law—which covers consumer protection and fair trading nationally and in each state and territory. It should be noted the available statistics on ticket scalping show that, despite media accounts, reports of such activity in Australia remain quite low. The evidence clearly demonstrated that ticket scalping is not a significant problem in Australia. That was quite surprising to me, as chair of the committee. Thus, the committee did not see the need for more regulation of the ticketing industry, although it did identify scope for the states and the federal government to work together to achieve greater consistency and co-ordination in how they deal with ticket scalping.
Also, while there was no persuasive evidence that ticket scalping presents a significant problem outside a limited number of events, there was evidence that participants in both the primary and secondary markets could do more to ensure that consumers were not exposed to unscrupulous conduct by ticket scalpers. The committee made a number of recommendations designed to encourage these participants to continue in their endeavours by introducing measures that would deny ticket scalpers opportunities to exploit consumers.
The committee's recommendations also recognise that consumers should be better prepared to protect their interests against unprincipled practices. Indeed, the committee stressed the importance of improved consumer education and of consumers reporting any complaints. To this end, the committee supports promoters and ticketing agencies as well as ticket brokers and their agents developing industry codes of best practice—with consumer protection as a primary objective. The committee believes, however, that the effectiveness of self-regulation may be compromised if those who adopt the codes do not subscribe to improved transparency in the industry and, in particular, to greater openness about the allocation and distribution of tickets.
Question agreed to.