Ticketmaster actively encourages scalpers to resell event tickets on its site because it collects a fee on both the initial sale and resale, according to a class action lawsuit filed Friday in California federal court.
“Have you ever wondered why Ticketmaster has been unable to rid itself of the scalpers who purchase mass quantities of concert or sports tickets from its website and then resell them for much more minutes later?” states the complaint. “The answer: Ticketmaster hasn’t wanted to rid itself of scalpers because, as it turns out, they have been working with them.”
The scheme, which could affect millions of consumers according to the complaint, was discovered by undercover reporters from Canada’s CBC and the Toronto Star, who attended a live entertainment convention in Las Vegas posing as scalpers. There, Ticketmaster representatives reportedly told them the company not only purposely ignores scalpers who use bots and fake identities to buy large amounts of tickets, but also makes it easier for them to quickly list those tickets for resale on the site through a software program called TradeDesk.
Ticketmaster’s Professional Reseller Handbook includes a program that “rewards professional reseller partners” for increased sales year over year, according to the complaint.
“Indeed, on its own website, Ticketmaster refers to the activity of professional scalpers as ‘unfair competition,'” states the complaint. “But now it has been caught secretly permitting, facilitating and actively encouraging the sale of tickets by scalpers on the secondary market using its TradeDesk platform — all for a second cut on those sales.”
Lead plaintiff Allen Lee is suing Ticketmaster and its parent company Live Nation Entertainment for unfair business practices and unjust enrichment. He is represented by Steve Berman and Elaine Byzszewski of Hagens Berman.
The proposed class is defined as: “All end-user purchasers in the United States who purchased a secondary market Ticketmaster ticket from a professional reseller participating in Ticketmaster’s resale partner program and/or using TradeDesk or a similar system operated by defendants, such as EventInventory or eimarketplace.”
The complaint notes that the practice is on the radar of at least two U.S. Senators, Jerry Moran and Richard Blumenthal, who sent a letter to Live Nation asking for clarification about the program.
Ticketmaster has not yet replied to a request for comment on the complaint.
This article originally appeared in The Hollywood Reporter.