    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

                          IN THE DARK: LACK OF TRANSPARENCY IN
                           THE LIVE EVENT TICKETING INDUSTRY

    =======================================================================

                                    HEARING

                                   BEFORE THE

                           SUBCOMMITTEE ON OVERSIGHT AND
                                   INVESTIGATIONS

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               FEBRUARY 26, 2020

                                   __________

                               Serial No. 116-102

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                       govinfo.gov/committee/house-energy
                            energycommerce.house.gov

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    52-376 PDF                  WASHINGTON : 2024

    -----------------------------------------------------------------------------------

                        COMMITTEE ON ENERGY AND COMMERCE

                         FRANK PALLONE, Jr., New Jersey
                                     Chairman
    BOBBY L. RUSH, Illinois              GREG WALDEN, Oregon
    ANNA G. ESHOO, California              Ranking Member
    ELIOT L. ENGEL, New York             FRED UPTON, Michigan
    DIANA DeGETTE, Colorado              JOHN SHIMKUS, Illinois
    MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
    JAN SCHAKOWSKY, Illinois             STEVE SCALISE, Louisiana
    G. K. BUTTERFIELD, North Carolina    ROBERT E. LATTA, Ohio
    DORIS O. MATSUI, California          CATHY McMORRIS RODGERS, Washington
    KATHY CASTOR, Florida                BRETT GUTHRIE, Kentucky
    JOHN P. SARBANES, Maryland           PETE OLSON, Texas
    JERRY McNERNEY, California           DAVID B. McKINLEY, West Virginia
    PETER WELCH, Vermont                 ADAM KINZINGER, Illinois
    BEN RAY LUJAN, New Mexico            H. MORGAN GRIFFITH, Virginia
    PAUL TONKO, New York                 GUS M. BILIRAKIS, Florida
    YVETTE D. CLARKE, New York, Vice     BILL JOHNSON, Ohio
        Chair                            BILLY LONG, Missouri
    DAVID LOEBSACK, Iowa                 LARRY BUCSHON, Indiana
    KURT SCHRADER, Oregon                BILL FLORES, Texas
    JOSEPH P. KENNEDY III,               SUSAN W. BROOKS, Indiana
        Massachusetts                    MARKWAYNE MULLIN, Oklahoma
    TONY CARDENAS, California            RICHARD HUDSON, North Carolina
    RAUL RUIZ, California                TIM WALBERG, Michigan
    SCOTT H. PETERS, California          EARL L. ``BUDDY'' CARTER, Georgia
    DEBBIE DINGELL, Michigan             JEFF DUNCAN, South Carolina
    MARC A. VEASEY, Texas                GREG GIANFORTE, Montana
    ANN M. KUSTER, New Hampshire
    ROBIN L. KELLY, Illinois
    NANETTE DIAZ BARRAGAN, California
    A. DONALD McEACHIN, Virginia
    LISA BLUNT ROCHESTER, Delaware
    DARREN SOTO, Florida
    TOM O'HALLERAN, Arizona
                                     ------

                               Professional Staff

                       JEFFREY C. CARROLL, Staff Director
                    TIFFANY GUARASCIO, Deputy Staff Director
                    MIKE BLOOMQUIST, Minority Staff Director
                  Subcommittee on Oversight and Investigations

                            DIANA DeGETTE, Colorado
                                      Chair
    JAN SCHAKOWSKY, Illinois             BRETT GUTHRIE, Kentucky
    JOSEPH P. KENNEDY III,                 Ranking Member
        Massachusetts, Vice Chair        MICHAEL C. BURGESS, Texas
    RAUL RUIZ, California                DAVID B. McKINLEY, West Virginia
    ANN M. KUSTER, New Hampshire         H. MORGAN GRIFFITH, Virginia
    KATHY CASTOR, Florida                SUSAN W. BROOKS, Indiana
    JOHN P. SARBANES, Maryland           MARKWAYNE MULLIN, Oklahoma
    PAUL TONKO, New York                 JEFF DUNCAN, South Carolina
    YVETTE D. CLARKE, New York           GREG WALDEN, Oregon (ex officio)
    SCOTT H. PETERS, California
    FRANK PALLONE, Jr., New Jersey (ex
        officio)
                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Diana DeGette, a Representative in Congress from the State
      of Colorado, opening statement.................................     1
        Prepared statement...........................................     3
    Hon. Brett Guthrie, a Representative in Congress from the
      Commonwealth of Kentucky, opening statement....................     4
        Prepared statement...........................................     6
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     7
        Prepared statement...........................................     8
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, opening statement......................................     9
        Prepared statement...........................................    11

                                   Witnesses

    Amy Howe, President and Chief Operating Officer, Ticketmaster....    13
        Prepared statement...........................................    15
        Answers to submitted questions...............................   157
    Bryan Perez, Chief Executive Officer, AXS........................    27
        Prepared statement...........................................    29
        Answers to submitted questions...............................   175
    Stephanie Burns, Vice President and General Counsel Stubhub......    38
        Prepared statement...........................................    40
        Answers to submitted questions...............................   182
    Ryan Fitts, Vice President, Legal Affairs, Vivid Seats...........    43
        Prepared statement...........................................    45
        Answers to submitted questions...............................   191
    Don Vaccaro, Co-Founder and Chief Executive Officer,
      Ticketnetwork..................................................    53
        Prepared statement...........................................    55
        Answers to submitted questions...............................   197
    Joseph F. Choti, President and Chief Executive Officer,
      Tickets.Com....................................................    64
        Prepared statement...........................................    65
        Answers to submitted questions...............................   208

                               Submitted Material

    Letter of December 23, 2020, to Mr Pallone, by Jonathan Su,
      Latham & Watkins LLP., Ticketmaster, submitted by Ms. DeGette
      \1\
    Letter of December 12, 2019, to Mr. Pallone, et al., by Dan
      Beckerman, President and CEO, Anschutz Entertainment Group,
      Inc., submitted by Ms. DeGette.................................    98
    Letter of January 31, 2020, to Mr. Pallone, et al., by Dan
      Beckerman, President and CEO, Anschutz Entertainment Group,
      Inc., submitted by Ms. DeGette.................................   120
    Letter of December 23, 2020, to Mr. Pallone, et al., from
      StubHub, submitted by Ms. DeGette \2\

    ----------
    \1\The information has been retained in committee files and also
      is available at https://docs.house.gov/meetings/IF/IF02/
      20200226/110588/HHRG-116-IF02-20200226-SD003.pdf.
    \2\The information has been retained in committee files and also
      is available at https https://docs.house.gov/meetings/IF/IF02/
      20200226/110588/HHRG-116-IF02-20200226-SD006.pdf.
    Email of December 10, 2019, to Mr. Pallone, et al., by Pantelis
      M. S. Golodny, Steptoe and Johnson LLP., and Ryan J Fitts, VP,
      Legal Affairs, Vivid Seats LLC, submitted by Ms. DeGette \3\
    Ticket Network of December 10, 2019, requested information, to
      the H.R. Committee on Energy and Commerce, submitted by Ms.
      DeGette........................................................   137
    Ticket Network Exhibits Chart, submitted by Ms. DeGette..........   143
    Letter of January 10, 2020, to Mr. Aslami and Committee Members,
      by Joe Choti, President and CEO, Tickets.com, submitted by Ms.
      DeGette \4\

    ----------
    \3\The information has been retained in committee files and also
      is available at https://docs.house.gov/meetings/IF/IF02/
      20200226/110588/HHRG-116-IF02-20200226-SD007.pdf.
    \4\The information has been retained in committee files and also
      is available at https://docs.house.gov/meetings/IF/IF02/
      20200226/110588/HHRG-116-IF02-20200226-SD010.pdf.

     IN THE DARK: LACK OF TRANSPARENCY IN THE LIVE EVENT TICKETING INDUSTRY

                                  ----------

                          WEDNESDAY, FEBRUARY 26, 2020

                      House of Representatives,
          Subcommittee on Oversight and Investigations,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:00 a.m. in
    the John D. Dingell Room 2123, Rayburn House Office Building,
    Hon. Diana DeGette (chairman of the subcommittee) presiding.
        Present: Representatives DeGette, Schakowsky, Kennedy,
    Ruiz, Kuster, Tonko, Clarke, Peters, Pallone (ex officio),
    Guthrie (subcommittee ranking member), Burgess, McKinley,
    Griffith, Brooks, and Walden (ex officio).
        Also present: Representative Flores.
        Staff Present: Mohammad Aslami, Counsel; Kevin Barstow,
    Chief Oversight Counsel; Jeffrey C. Carroll, Staff Director;
    Manmeet Dhindsa, Counsel; Austin Flack, Staff Assistant; Evan
    Gilbert, Deputy Press Secretary; Waverly Gordon, Deputy Chief
    Counsel; Tiffany Guarascio, Deputy Staff Director; Alex Hoehm-
    Saric, Chief Counsel, Communications and Consumer Protection;
    Zach Kahan, Outreach and Member Service Coordinator; Chris
    Knauer, Oversight Staff Director; Jon Monger, Counsel; ?Peter
    Rechter, Counsel; Tim Robinson, Chief Counsel; Emily Ryan, GAO
    Detailee; Andrew Souvall, Director of Communications, Outreach
    and Member Services; Benjamin Tabor, Staff Assistant; Rebecca
    Tomilchik, Staff Assistant; Anna Yu, Professional Staff Member;
    Jennifer Barblan, Minority Chief Counsel, Oversight and
    Investigations; Brittany Havens, Minority Professional Staff,
    Oversight and Investigations; Peter Kielty, Minority General
    Counsel; Bijan Koohmaraie, Minority Deputy Chief Counsel,
    Consumer Protection and Commerce; Tim Kurth, Minority Chief
    Counsel, Consumer Protection and Commerce; Ryan Long, Minority
    Deputy Staff Director; Brannon Rains, Minority Policy Analyst;
    Zack Roday, Minority Communications Director; and Callie
    Strock, Minority Press Secretary.
        Ms. DeGette. The subcommittee on Oversight and
    Investigations hearing will now come to order.

     OPENING STATEMENT OF HON. DIANA DeGETTE, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF COLORADO

        Today the Subcommittee on Oversight and Investigations is
    holding a hearing entitled, ``In The Dark: Lack of Transparency
    in the Live Event Ticketing Industry.'' The purpose of today's
    hearing is to examine policies and practices in the live event
    ticketing industry. The Chair will now recognize herself for
    purposes of an opening statement.
        Today's hearing will examine a lack of transparency in the
    live event ticketing industry, an industry that's rife with
    practices that are harmful to consumers. While many of us may
    remember standing in line at the box office to purchase tickets
    to a concert or sporting event or even buying tickets outside
    of an arena from a scalper, most ticket sales to live events
    now take place online through apps or ticketing websites.
        In 2017 alone, online ticketing represented a nine billion-
    dollar market in the United States. Unfortunately, the
    industry's online financial success has often been at the
    expense of the consumer.
        While it is certainly easier to buy tickets to live events
    today, online ticketing sales have led to anticonsumer
    practices across the industry. These practices have been well-
    documented by both State and Federal authorities. In 2016, for
    example, the New York Attorney General investigated the live
    event ticketing marketplace and found that, quote, ``ticketing
    is a fixed game.''
        More recently, the Government Accountability Office found a
    number of concerning consumer protection issues in the
    industry, including difficulty buying tickets at face value, a
    lack of transparency around ticket fees, and misleading
    marketing practices.
        In response to consumer concerns, in June, 2019, the
    Federal Trade Commission held a workshop designed to discuss
    problematic practices in the ticketing industry. As a part of
    that effort, consumer groups raised a host of consumer
    protection issues in the online marketplace to the FTC
    including practices that misled consumers about ticket prices
    or availability, the prevalence of certain ticketing websites
    that may confuse consumers about the entity from which they are
    purchasing tickets, and restrictions that limit a consumer's
    ability to transfer tickets.
        On the heels of these investigations and the FTC workshop,
    last November the committee continued its effort in examining
    the ticketing industry by sending bipartisan letters to six
    ticketing companies that make up a diverse cross-section of the
    industry. The committee's letter inquired into a range of
    issues that impact consumers. The company's responses and the
    committee's investigation validated our concerns that consumers
    face a number of disturbing practices when trying to buy
    tickets online.
        Today's hearing will give us the opportunity to hear
    directly from companies about these practices and what can be
    done. In particular, we will focus on five key findings today.
        First, consumers attempting to buy tickets online continue
    to be confronted by high hidden fees. These fees are often not
    disclosed until the end of the transaction, which may mislead
    consumers about the total cost of the ticket and frustrate
    their ability to accurately compare prices. Today I want the
    companies who engage in this practice to explain why they wait
    until the very end of the buying process to pile on fees
    instead of providing the total cost upfront, which is known as
    all-in pricing.
        Second, companies that place restrictions on consumers from
    transferring purchased tickets to another individual may be
    limiting choice for consumers and driving up prices. I want to
    know why certain companies seem to be making it harder to
    transfer or to resell a ticket that he has already purchased
    and whether this practice is stifling the market and harming
    consumers. I also want to know if the practice really prevents
    fraud or if it's just an excuse to limit consumer choice.
        Third, consumers appear to be impacted by a lack of
    transparency relating to ticket availability. Consumers may be
    unaware that only a limited number of seats frequently could be
    available by the time tickets go on sale to the general public.
    For example, the New York Attorney General's investigation
    found that a majority of tickets for the most popular concerts
    were reserved for industry insiders or presale events. I want
    to know how often this occurs, why it's occurring, and why some
    companies in the primary market are reluctant to let consumers
    know about the actual number of tickets available at the time
    of general sale.
        The final two findings relate to white label websites and
    the selling of speculative tickets. White label websites may
    employ deceptive marketing practices to make consumers believe
    they are purchasing tickets from an official website when truly
    they are not. A speculative ticket refers to instances in which
    a seller offers a ticket for sale on a resale exchange before
    the seller has the ticket in hand. I want to know how prevalent
    these practices are, how they impact consumers, and whether the
    industry believes we should limit them.
        As you can see, there's a lot to discuss today. It's clear
    that many of these practices place consumers at a disadvantage
    when buying tickets. I look forward to discussing how we can
    put the consumer first as we look towards findings solutions to
    make the industry much more transparent.
        [The prepared statement of Ms. DeGette follows:]

                    Prepared Statement of Hon. Diana DeGette

        Today's hearing will examine the lack of transparency in
    the live event ticketing industry-an industry that is rife with
    practices that are harmful to consumers.
        While many of us may remember standing in line at the box
    office to purchase tickets to a concert or sporting event, or
    even buying tickets outside of an arena from a scalper, most
    ticket sales to live events now take place online through apps
    or ticketing websites.
        In 2017 alone, online ticketing represented a $9 billion
    market in the United States. Unfortunately, the industry's
    online financial success has often been at the expense of the
    consumer.
        While it is certainly easier to buy tickets to live events
    today, online ticketing sales have led to anti-consumer
    practices across the industry. These practices have been well-
    documented by both state and federal authorities.
        In 2016, for example, the New York Attorney General
    investigated the live event ticketing marketplace and found
    that [quote] ``Ticketing is a fixed game.''
        More recently, the Government Accountability Office found a
    number of concerning consumer protection issues in the
    industry, including difficulty buying tickets at face value, a
    lack of transparency around ticket fees, and misleading
    marketing practices.
        In response to consumer concerns, in June 2019, the Federal
    Trade Commission held a workshop designed to discuss
    problematic practices in the ticketing industry.
        As part of that effort, consumer groups raised a host of
    consumer protection issues in the online marketplace to the
    FTC, including practices that mislead consumers about ticket
    prices or availability, the prevalence of certain ticketing
    websites that may confuse consumers about the entity from which
    they are purchasing tickets, and restrictions that limit a
    consumer's ability to transfer tickets.
        On the heels of these investigations and the FTC workshop,
    last November, the Committee continued its effort in examining
    the ticketing industry by sending bipartisan letters to six
    ticketing companies that make up a diverse cross-section of the
    industry.
        The Committee's letter inquired into a range of issues that
    impact consumers. The companies' responses and the Committee's
    investigation validated our concerns that consumers face a
    number of disturbing practices when trying to buy tickets
    online. Today's hearing gives us the opportunity to hear
    directly from companies about these troubling practices.
        In particular, we will focus on five key findings today:
        First, consumers attempting to buy tickets online continue
    to be confronted by high, hidden fees. These fees are often not
    disclosed until the end of the transaction, which may mislead
    consumers about the total cost of the ticket and frustrate
    their ability to accurately compare prices. Today, I want the
    companies to explain why they wait until the very end of the
    buying process to pile on fees instead of providing the total
    cost upfront, which is known as ``all-in'' pricing.
        Second, companies that place restrictions on consumers from
    transferring purchased tickets to another individual may be
    limiting choice for consumers and driving up prices. I want to
    know why certain companies seem to be making it harder to
    transfer or resell a ticket that has already purchased, and
    whether this practice is stifling the market and harming
    consumers. I also want to know if this practice really prevents
    fraud as some companies suggest or if this is another excuse to
    limit consumer choice.
        Third, consumers appear to be impacted by a lack of
    transparency related to ticket availability. Consumers may be
    unaware that only a limited number of seats could be available
    by the time tickets go on sale to the general public. For
    instance, the New York Attorney General's investigation found
    that a majority of tickets for the most popular concerts were
    reserved for industry insiders or pre-sale events. I want to
    know why this is occurring and why some companies in the
    primary market are reluctant to let consumers know about the
    actual number of tickets available at the time of general sale.
        The final two findings relate to ``white-label websites''
    and the selling of speculative tickets. ``White-label''
    websites may employ deceptive marketing practices to make
    consumers believe they are purchasing tickets from an official
    website when they are not. A speculative ticket refers to
    instances in which a seller offers a ticket for sale on a
    resale exchange before the seller has the ticket in hand. I
    want to know how prevalent these practices are, how they impact
    consumers, and whether the industry believes we should limit
    them.
        As you can see, the companies here today have a lot to
    answer for. It is clear that many of their practices are
    placing consumers at a disadvantage when buying tickets. I look
    forward to discussing how we can put the consumer first as we
    look toward finding solutions to make this industry much more
    transparent.
        And with that, I'll yield back and I'll recognize the
    ranking member, Mr. Guthrie, from Kentucky for 5 minutes.

     OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
               CONGRESS FROM THE COMMONWEATH OF KENTUCKY

        Mr. Guthrie. I thank you very much.
        Thank you, Chair DeGette, for holding this hearing.
        Many Americans have very fond memories of their first
    concert, their first football or baseball game. I know I do. I
    remember my first concert when I was 11 years old. I got to see
    Elvis, and I think what I remember about it more than anything
    was the effort to get tickets to see Elvis. My uncle had a
    dental office right next to the facility, and they rotated.
    People had to wait in long lines. As they kept adding shows, we
    kept getting opportunities to see Elvis. So I had a chance to
    do that.
        But it's completely changed now and I know as we have
    everlasting memories of these concerts, purchasing tickets for
    live events can be a difficult process for consumers and
    whether it's extra fees, transferability of tickets, deceptive
    white label websites, or speculative tickets, all of these
    issues can negatively impact the consumer experience. This is
    why we wrote a bipartisan letter to six companies in November,
    asking them about their policies and practices as it relates to
    live event ticketing.
        Some of these issues create minor annoyances or
    inconveniences, such as not being able to see the total cost of
    the ticket with taxes and fees until the end of the purchase
    flow, but other issues can create major inconveniences, a
    financial loss for consumers, such as being denied entry into
    an event they potentially traveled a long distance to attend
    because unbeknownst to them it turns out the ticket they bought
    was not valid.
        The Federal Trade Commission and States Attorneys General
    are the cops on the beat when it comes to overseeing this
    industry. For example, the FTC Act prohibits unfair and
    deceptive acts or practices in affecting commerce, and the FTC
    can enforce the act for issues related to event ticketing and
    ticketing companies. And State Attorneys General have tools to
    go after bad actors under their State consumers protection
    laws. If bad actors, some of which we see exploiting the
    secondary market, seek to deceive or mislead consumers, the FTC
    and State Attorneys General can and should hold them
    accountable.
        In addition, the Better Online Ticket Sales Act of 2016, we
    call the BOTS Act, which became law in December of 2016,
    addresses tickets, and ticketing issues by prohibiting the
    circumvention of the security measure, access control systems,
    or other technological control measures used by online ticket
    issuers.
        Live events are not just for concerts. They encompass other
    forms of entertainment such as theater and sporting events.
    Some of the issues we plan to discuss today do not equally
    apply to all events, and I think it is an important distinction
    to make throughout today's discussion where applicable. For
    example, with respect to ticket availability, a venue that a
    team plays at such as a stadium or arena, has a static number
    of tickets. In other words, you know how many seats that
    stadium holds and therefore, how many tickets are available for
    any given event. Conversely, with concerts, the stage and sound
    system configuration vary by artist and event type, impacting
    the number of seats that cannot be used because they're behind
    or to the side of the stage. As a result, the number of tickets
    for that type of event varies.
        In addition, at today's hearing, we expect to discuss white
    label websites, which are sales websites built by one company
    that allows affiliates to use the software to build their own
    uniquely branded websites. While white label websites are not
    inherently bad, there are deceptive white label websites that
    often appear as paid results of internet searches for venues
    and events and contain a URL and/or language and images on a
    website that are designed in a way that might mislead consumers
    to think they are purchasing tickets directly from a venue or
    an artist. We think that it's an important distinction to make,
    as well, as we move forward in today's discussion.
        Today's hearing serves as an important opportunity for us
    to examine and to dive into some of those concerns and issues
    that consumers face, while making the important distinctions
    between event types and legitimate versus nefarious practices
    and to discuss ways to better inform and protect the consumer.
    The bottom line: Consumers should be able to clearly know what
    they are buying, who they're buying it from, and what is
    included in the price of the ticket; ensure that what they
    purchase is legitimate, and will deliver to them--be delivered
    to them in time for the event and is valid and will be honored
    at the venue.
        I thank our witnesses for being here today and being part
    of this important discussion.
        And I yield back.
        [The prepared statement of Mr. Guthrie follows:]

                    Prepared Statement of Hon. Brett Guthrie

        Chair DeGette, thank you for holding this hearing.
        Many Americans have fond memories of their first concert,
    or their first football or baseball game--I know I do. While
    these events can create lasting memories, purchasing tickets
    for live events can sometimes be a difficult process for
    consumers. Whether it is extra fees; transferability of
    tickets; deceptive white-label websites; or speculative
    tickets--all of these issues can negatively impact the consumer
    experience. This is why we wrote a bipartisan letter to six
    companies in November asking them about their policies and
    practices as it relates to live event ticketing.
        Some of these issues create minor annoyances or
    inconveniences, such as not being able to see the total cost of
    the ticket, with taxes and fees, until the end of the purchase
    flow. But other issues can create major inconveniences or
    financial loss for consumers, such as being denied entry into
    an event that they potentially traveled a long distance to
    attend - because unbeknownst to them, it turns out the ticket
    that they bought was not valid.
        The Federal Trade Commission (FTC) and State Attorneys
    General are the cops on the beat when it comes to overseeing
    this industry. For example, the FTC Act prohibits unfair and
    deceptive acts or practices in or affecting commerce, and the
    FTC can enforce the act for issues related to event ticketing
    and ticketing companies. And State Attorneys General have tools
    to go after bad actors under their state consumer protection
    laws. If bad actors--some of which we see exploiting the
    secondary market--seek to deceive or mislead consumers, the FTC
    and State Attorneys Generals can--and should--hold them
    accountable.
        In addition, the Better Online Ticket Sales Act of 2016
    (The BOTS Act), which became law in December 2016, addresses
    ticketing issues by prohibiting the circumvention of a security
    measure, access control system, or other technological control
    measure used online by a ticket issuer.
        Live event tickets are just not for concerts--they
    encompass other forms of entertainment such as theater and
    sporting events. Some of the issues we plan to discuss today do
    not equally apply to all events and I think that is an
    important distinction to make throughout today's discussion,
    where applicable. For example, with respect to ticket
    availability--a venue that a team plays at, such as a stadium
    or arena has a static number of tickets. In other words, you
    know how many seats that stadium holds, and therefore how many
    tickets are available for any given event. Conversely, with
    concerts, the stage and sound system configuration can vary by
    artist and event type, impacting the number of seats that
    cannot be used because they are behind or to the side of the
    stage. As a result, the number of tickets for that type of
    event varies.
        In addition, at today's hearing, we expect to discuss
    white-label websites, which are sales websites built by one
    company that allows affiliates to use the software to build
    their own, uniquely branded websites. While white-label
    websites are not inherently bad, there are deceptive white-
    label websites that often appear as paid results of internet
    searches for venues and events and contain a URL and/or
    language and images on the website that are designed in a way
    that might mislead consumers to think they are purchasing
    tickets directly from a venue or artist. We think that is an
    important distinction to make as well as we move forward with
    today's discussion.
        Today's hearing serves as an important opportunity for us
    to examine and dive into some of these concerns and issues that
    consumers face, while making the important distinctions between
    event types and legitimate versus nefarious practices, and to
    discuss ways to better inform and protect the consumer.
        Bottom line, consumers should be able to clearly know what
    they are buying, who they are buying it from, what is included
    in the price of the ticket, ensure that what they purchase is
    legitimate, will be delivered to them in time for the event,
    and is valid and will be honored at the venue.
        I thank our witnesses for being here today and being part
    of this important discussion, and I yield back.

        Ms. DeGette. I thank the gentleman.
        The Chair now recognizes the chairman of the full
    committee, Mr. Pallone, for 5 minutes.

    OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
                IN CONGRESS FROM THE STATE OF NEW JERSEY

        Mr. Pallone. Thank you, Chairman DeGette.
        Today's hearing will bring some much needed transparency to
    the live event ticketing industry. Every day millions of
    Americans shop on the internet for tickets for live events like
    sporting events and concerts. In some ways, the internet has
    made this experience more convenient, but it also has led to
    consumers being ripped off as they try to navigate a ticketing
    industry that, for too long, has operated in the dark.
        Consumers now face a myriad of harmful practices that can
    lead to them paying more for tickets or paying for tickets that
    they are prohibited from selling or transferring if they're
    unable to attend the event. In some instances, consumers are
    not even receiving the ticket as promised after they purchased
    it.
        This hearing is meant not only to better understand the
    many challenges consumers face in the ticketing marketplace but
    to also identify steps to protect consumers from being ripped
    off.
        This committee has taken action in recent years to improve
    the ticket buying experience for consumers. In 2016, the
    committee in the House passed H.R. 5104, the Better On-Line
    Ticket Sales Act of 2018, or the BOTS Act. This legislation was
    signed into law later that year. It cracks down on the use of
    computer programs that instantly buy up large quantities of
    tickets before real people can buy them so they can later be
    resold at higher prices.
        Also in 2016, we asked the Government Accountability Office
    to investigate consumer protection issues in the live ticketing
    marketplace so that we could better understand the problem and
    GAO's investigation underscored a host of challenges that
    consumers face when trying to buy tickets online. For example,
    they found that websites often fail to display or disclose all
    the fees up front so that the total cost of a ticket can only
    be known at checkout. This makes it difficult for consumers to
    compare prices with other sites.
        GAO also found that professional resellers have a
    competitive advantage over the typical consumer attempting to
    buy tickets on the primary market. This can force consumers to
    the secondary market, where they may face significant price
    increases. GAO also found that consumers can face deceptive
    marketing practices including, websites that may look similar
    to that of an official venue but instead often resell tickets
    for marked-up prices.
        And these are all troubling examples of how consumers are
    being taken advantage of when they're just trying to purchase a
    ticket for a live event. It was these continuing concerns that
    led the committee last year to launch a bipartisan
    investigation into the industry, and our investigation found
    that the live events ticketing industry is still engaging in a
    number of anticonsumer practices. Consumers still experience
    hidden fees, restrictions on transferring a ticket to someone
    else, and deceptive and misleading websites.
        It's clear that ticketing marketplace needs reform in order
    to ensure the market is transparent, fair, and working for
    consumers. In order to help correct some of the problems that
    still persist in the industry, last year, I joined
    Representative Pascrell in sponsoring the BOSS Act. This
    legislation would provide much-needed transparency and
    regulations to help level the playing field for consumers.
        In the meantime, we need answers to several important
    questions today. We need to know what's going on to take for
    ticket sellers to--what it will take really for ticket sellers
    to list the total all-in price of the tickets upfront on their
    platforms.
        We need to know why primary market sellers refuse to inform
    consumers about how many tickets are actually on sale to the
    general public, and it's time the industry is transparent with
    consumers about how many tickets are being held back for
    industry insiders, reserved for presales, or placed directly on
    the secondary market at a higher price.
        We also need to know what additional disclosures are needed
    to protect consumers from potential deception or outright fraud
    by white label websites and the sale of speculative tickets.
        And, finally, we need to know why hurdles and restrictions
    continue to be put in place for those looking to transfer
    tickets.
        So it's time we finally bring transparency to this
    marketplace so that we can protect consumers which, of course,
    is always our primary goal.
        And unless somebody else wants my time, I'm going to yield
    back, Madam Chair. Thank you.
        [The prepared statement of Mr. Pallone follows:]

                 Prepared Statement of Hon. Frank Pallone, Jr.

        Today's hearing will bring some much-needed transparency to
    the live event ticketing industry.
        Every day, millions of Americans shop on the internet for
    tickets for live events like sporting events and concerts. In
    some ways, the internet has made this experience more
    convenient, but it has also led to consumers being ripped off
    as they try to navigate a ticketing industry that for too long
    has operated in the dark. Consumers now face a myriad of
    harmful practices that can lead to them paying more for tickets
    or paying for tickets that are prohibited from reselling or
    transferring if they are unable to attend the event. In some
    instances, consumers are not even receiving the ticket as
    promised after they purchased it.
        This hearing is meant to not only better understand the
    many challenges consumers face in the ticketing marketplace,
    but to also identify steps to protect consumers from being
    ripped off. This Committee has taken action in recent years to
    improve the ticket buying experience for consumers.
        In 2016, the Committee and the House passed H.R. 5104, the
    ``Better Online Ticket Sales Act of 2016,'' or the ``BOTS
    Act.'' This legislation was signed into law later that year. It
    cracks down on the use of computer programs that instantly buy
    up large quantities of tickets--before real people can buy
    them--so that they can later be resold at higher prices.
        Also, in 2016, we asked the Government Accountability
    Office to investigate consumer protection issues in the live
    event ticketing marketplace so that we could better understand
    the problem.
        GAO's investigation underscored a host of challenges that
    consumers face when trying to buy tickets online. For example,
    they found that websites often fail to display or disclose all
    of the fees upfront, so that the total cost of a ticket can
    only be known at checkout. This makes it difficult for
    consumers to compare prices with other sites. GAO also found
    that professional resellers have a competitive advantage over
    the typical consumer attempting to buy tickets on the primary
    market. This can force consumers to the secondary market, where
    they may face significant price increases.
        GAO also found that consumers can face deceptive marketing
    practices, including websites that may look similar to that of
    an official venue, but instead often resell tickets for marked
    up prices.
        These are all troubling examples of how consumers are being
    taken advantage of when they are just trying to purchase a
    ticket for a live event.
        It was these continuing concerns that led the Committee
    last year to launch a bipartisan investigation into the
    industry. Our investigation found that the live events
    ticketing industry is still engaging in a number of anti-
    consumer practices. Consumers still experience hidden fees
    restrictions on transferring a ticket to someone else and
    deceptive and misleading websites. It is clear that the
    ticketing marketplace needs reforms in order to ensure the
    market is transparent, fair and working for consumers.
        In order to help correct some of the problems that still
    persist in the industry, last year, I joined Representative
    Pascrell in sponsoring the ``BOSS Act.'' This legislation would
    provide much needed transparency and regulation to help level
    the playing field for consumers.
        In the meantime, we need answers to several important
    questions today. We need to know what it's going to take for
    ticket sellers to list the total, all-in price of the tickets
    upfront on their platforms.
        We need to know why primary market sellers refuse to inform
    consumers about how many tickets are actually on sale to the
    general public. It's time the industry is transparent with
    consumers about how many tickets are being held back for
    industry insiders, reserved for presales, or placed directly on
    the secondary market at a higher price.
        We need to know what additional disclosures are needed to
    protect consumers from potential deception or outright fraud by
    white label websites and the sale of speculative tickets.
        And, finally, we need to know why hurdles and restrictions
    continue to be put into place for those looking to transfer
    tickets.
        It's time we finally bring transparency to this marketplace
    so that we can protect consumers.

        Ms. DeGette. The chairman yields back.
        The Chair now recognizes the ranking member of the full
    committee, Mr. Walden, for 5 minutes.

      OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF OREGON

        Mr. Walden. Good morning, Madam Chair, and welcome to all
    our witnesses and guests. Thank you all for being here.
        As the--as Ranking Member Guthrie mentioned, purchasing
    tickets to a live event is something we can all relate to.
    Live--I didn't know he was 11 when he saw Elvis, though.
    That's--yes. Wow, you're old.
        Live entertainment, whether it's a--whether it's a concert,
    a theater event, or a sporting event can lead to once-in-a-
    lifetime experiences that create lasting memories. However, a
    lack of transparency or deceptive acts and/or fraud in the
    industry can cause a lot of frustration to say the least, in
    some cases, financial harm to consumers.
        Some of these issues include deceptive white label
    websites--you've heard about that--speculative tickets,
    fraudulent tickets, to name just a few. I look forward to
    hearing what the six companies before us today are doing about
    that and what you're doing to combat some of these issues,
    protect consumers, and ensure consumer satisfaction.
        As Mr. Guthrie mentioned, it's important we keep in mind
    distinctions with ticket availability issues, different types
    of white label websites, and more. But it's equally important
    that we balance consumer protection with potentially unintended
    consequences, too, to the industry that will ultimately
    negatively impact consumers as we explore potential solutions
    to some of these issues.
        For example, a 2018 U.S. Government Accountability Office
    report that was requested by, as you heard, the bipartisan
    leaders of the committee on event ticket sales and market
    characteristics and consumer protection issues noted that there
    are advantages and disadvantages to certain practices and in
    some cases, it's unclear whether new requirements would
    introduce new compliance challenges for the ticketing industry
    such as requiring companies to disclose proprietary
    information.
        Therefore, it's important that this subcommittee gathers
    all the information necessary and the facts before determining
    what the potential solutions may be to further enhance consumer
    protection within the industry.
        Furthermore, the Better Online Ticket Sales Act of 2016,
    known as the BOTS Act, was signed into law in 2016, yet neither
    the Federal Trade Commission nor the States have taken
    enforcement action under this statute to date. In addition to
    the issues outlined in the committee's bipartisan letter sent
    to the six companies in November, it would be helpful to hear
    from you-all before us today whether you see bots as an issue
    in the industry now and how, if at all, it is harmful to
    consumers, so the issue of bots.
        I understand bad actors utilizing bots to game our system
    may be beyond our borders. That does not mean they are beyond
    our reach. I'm proud of this committee's leadership on
    extending the U.S. SAFE WEB Act that reaffirms the FTC's
    ability to hold foreign bad actors accountable. As with many
    problems, there's no easy fix and that's probably true with
    this as well.
        This committee should work with the FTC, the Federal Trade
    Commission, as part of our investigation to figure out how we
    can address not only this bots issue but also other ticket
    issues that present create harm to consumers.
        The most important thing to keep in mind across the issues
    that will be discussed today is the need for transparency and
    appropriate disclosures to consumers and, if there's adequate
    transparency, consumers will then have the necessary
    information they need in order to make an informed decision
    about whether or not they want to purchase a live event ticket,
    who they want to purchase the ticket from, and what kind of
    ticket they want to purchase and what the breakdown is for the
    total cost of the ticket including taxes and fees.
        For example, if a consumer knows that a ticket's
    dynamically priced and knows what it means for a ticket to be
    dynamically priced, it should then be left to the consumer to
    decide whether or not they want to purchase a dynamically
    priced ticket. In addition, the limits placed on a ticket that
    designates whether the ticket's transferable or not should be
    clearly disclosed to consumers before the consumer purchases
    the ticket so that that consumer understands the limitations
    placed on the ticket to help avoid possible frustration and
    financial loss down the road.
        So, again, I want to thank you-all for being here today,
    testifying before the Oversight and Investigation Subcommittee.
    I look forward to listening to your testimony and working with
    my colleagues here on the committee on both sides to ensure
    that we make fully informed decisions that enhance consumer
    protection.
        So with that, Madam Chair, I would yield back the balance
    of my time.
        [The prepared statement of Mr. Walden follows:]

                     Prepared Statement of Hon. Greg Walden

        Chair DeGette, thank you for holding this hearing.
        As Ranking Member Guthrie mentioned, purchasing tickets to
    a live event is something that we can all relate to. Live
    entertainment, whether it is a concert, theater event, or a
    sporting event, can lead to once in a lifetime experiences that
    create lasting memories. However, a lack of transparency,
    deceptive acts, and/or fraud in this industry can cause
    frustration and, in some cases, financial harm to consumers.
        Some of the issues include deceptive white-label websites,
    speculative tickets, and fraudulent tickets, to name a few. I
    look forward to hearing what the six companies before us today
    are doing to combat some of these issues, protect their
    consumers, and ensure customer satisfaction.
        As Ranking Member Guthrie mentioned, it is important that
    we keep in mind distinctions with ticket availability issues,
    different types of white label websites, and more. But, it is
    equally important that we balance consumer protection with
    potentially unintended consequencesto the industry that will
    ultimately impact consumers as we explore potential solutions
    to some of these issues.
        For example, a 2018 U.S. Government Accountability Office
    (GAO) report that was requested by bipartisan leaders of this
    Committee on event ticket sales and the market characteristics
    and consumer protection issues noted that there are advantages
    and disadvantages to certain practices, and in some cases, it
    is unclear whether new requirements would introduce new
    compliance challenges for the ticketing industry, such as
    requiring companies to disclose proprietary information.
    Therefore, it is important that this Subcommittee gather all
    the necessary facts before determining what the potential
    solutions may be to ensure consumer protection within the
    industry.
        Furthermore, the Better Online Ticket Sales Act of 2016
    (BOTS Act) was signed into law in 2016, yet neither the Federal
    Trade Commission (FTC) nor the states have taken enforcement
    action under this statute to date. In addition to the issues
    outlined in the Committee's bipartisan letter sent to the six
    companies in November, it would be helpful to hear from the
    companies testifying before us today whether they still see
    bots as an issue in the industry and how, if at all, it is
    harmful to consumers.
        I understand bad actors utilizing bots to game our system
    may be beyond our borders, but that does not mean they are
    beyond our reach. I am proud of this Committee's leadership on
    extending the U.S. SAFE WEB Act that reaffirms the FTC's
    ability to hold foreign bad actors accountable. As with many
    problems, there is no easy fix to this one either. This
    Committee should work with the FTC as part of our investigation
    to figure out how we can address not only this bots issue, but
    other ticket issues that present concrete harms to consumers.
        The most important thing to keep in mind across all the
    issues that will be discussed today is the need for
    transparency and appropriate disclosures to consumers. If there
    is adequate transparency, consumers will then have the
    necessary information they need in order to make an informed
    decision about whether or not they want to purchase a live
    event ticket; who they want to purchase the ticket from; what
    kind of ticket they want to purchase; and what the breakdown is
    for the total cost of the ticket, including taxes and fees.
        For example, if a consumer knows that a ticket is
    dynamically priced and knows what it means for a ticket to be
    dynamically priced, it should then be left to the consumer to
    decide whether or not they want to purchase a dynamically
    priced ticket. In addition, the limits placed on a ticket that
    designate whether the ticket is transferrable or not should be
    clearly disclosed to a consumer before the consumer purchases
    the ticket so that the consumer understands the limitations
    placed on the ticket, to help avoid possible frustration and
    financial loss down the road.
        I want to thank the companies before us today for agreeing
    to testify before the Subcommittee. I look forward to listening
    to the testimony of the witnesses and working with our
    colleagues on the other side of the aisle to ensure that we
    make fully informed decisions to protect consumers. I yield
    back.

        Ms. DeGette. The gentleman yields back, and that concludes
    the opening statements.
        I ask unanimous consent that Members' written opening
    statements be made a part of the record.
        Without objection, so ordered.
        I now want to introduce our witnesses for today's hearing,
    and I want to thank all of you for coming today: Ms. Amy Howe,
    who's the President and Chief Operating Officer; Ticketmaster,
    Mr. Brian Perez, who's the Chief Executive Officer, AXS, Ms.
    Stephanie Burns, Vice President and General Counsel, StubHub,
    Mr. Ryan Fitts, Vice President, Legal Affairs, Vivid Seats, Mr.
    Don Vaccaro, Founder and Chief Executive, TicketNetwork, and
    Mr. Joe Choti, President and Chief Executive Officer,
    Tickets.com.
        Again, thanks to all of you and I know all of you are aware
    the committee's holding an investigative hearing and, when
    doing so, we have the practice of taking our testimony under
    oath.
        Does anyone object to testifying under oath today?
        Let the record reflect the witnesses have responded ``no.''
        The Chair then advises you that under the rules of the
    House and the rules of the committee, you are entitled to be
    accompanied by counsel. Does any of you desire to be
    accompanied by counsel today?
        Let the record reflect that the witnesses have responded
    ``no.''
        So, if you would, please, rise and raise your right hand so
    you may be sworn in.
        [Witnesses sworn.]
        Ms. DeGette. You may be seated.
        Let the record reflect the witnesses responded
    affirmatively, and you're now under oath and subject to the
    penalties set forth in Title 18, Section 1001 of the U.S. Code.
        The Chair now recognizes our witnesses for a 5-minute
    summary of each of their written statements. In front of you is
    a microphone, a timer, and a series of lights. The timer will
    count down your light, and the red light will turn on when your
    5 minutes has expired.
        So now I'd first like to recognize you, Ms. Howe, for 5
    minutes for your opening statement.

     TESTIMONY OF AMY HOWE, PRESIDENT AND CHIEF OPERATING OFFICER,
       TICKETMASTER; BRYAN PEREZ, CHIEF EXECUTIVE OFFICER, AXS;
     STEPHANIE BURNS, VICE PRESIDENT AND GENERAL COUNSEL, STUBHUB;
      RYAN FITTS, VICE PRESIDENT, LEGAL AFFAIRS, VIVID SEATS; DON
    VACCARO, CO-FOUNDER AND CHIEF EXECUTIVE OFFICER, TICKETNETWORK;
         AND JOE CHOTI, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
                              TICKETS.COM

                         TESTIMONY OF AMY HOWE

        Ms. Howe. Good morning.
        Chairman Pallone, Ranking Member Walden, Chair DeGette,
    Ranking Member Guthrie, and members of the subcommittee, thank
    you for the opportunity to appear before you today.
        My name is Amy Howe, and I'm the president and chief
    operating officer of Ticketmaster, North America. As a leader
    in the live event ticketing industry, we share your interest in
    improving the ticketing ecosystem to better protect consumers.
    Before addressing the specifics of these important issues, I'd
    like to offer some important context.
        The live entertainment industry is like no other. It's all
    about once-in-a-lifetime experiences to draw the most
    passionate fans.
        Ms. DeGette. Excuse me, Ms. Howe, if you can just move that
    microphone a little closer----
        Ms. Howe. Is that better?
        Ms. DeGette. We're been having problems with them dropping
    off. That's better. Thank you.
        Ms. Howe. Thank you.
        To draw the most passionate fans on Earth to unforgettable
    moments in time. As we like to say, life only happens once. It
    sounds simple, but it helps remind our team that for each fan
    we serve, we have only one chance to get it right. We want the
    fan experience to be memorable and, importantly, simple, safe,
    and transparent. We do our best every day to deliver on this
    promise and keep Ticketmaster free from the unethical and
    illegal activities that hurt consumers.
        The greatest challenge is simply supply and demand. Even in
    the world's biggest venues, events have limited capacity. This
    imbalance naturally causes disappointment for fans who are
    unable to get tickets and unfortunately, opportunity for bad
    actors to prosper.
        We invest millions of dollars annually to protecting our
    platform so fans, clients, and brokers can avoid issues created
    by bad actors and engage within a legitimate, reliable
    ticketing marketplace. Unfortunately, there will always be
    those who want to cheat the system, take advantage of fans, and
    give our industry a bad name. The committee has rightly called
    out many of these tactics: Deceptive websites, speculative
    tickets, bots, and lack of transparency, amongst others.
        When we received the committee's November inquiry, we saw
    that we have many of the same concerns. As we've shared with
    the committee, Ticketmaster bans speculative ticketing on our
    platform, we report deceptive websites, we combat bots, and we
    support all-in pricing. Let me quickly touch on each of these.
        A leading obstacle to fans' ability to access tickets
    fairly is the proliferation of sophisticated consumer
    automation, or bots, which accesses thousands of tickets to
    resell them to fans at staggering prices. Forty percent of
    activity on ticketing sites today is automated, with nearly 70
    percent of that traffic here in the U.S. alone.
        Since 2018, Ticketmaster has blocked over 30 billion bot
    purchase attempts. We do this because we fundamentally believe
    tickets should go to fans at a price determined by the artist.
    We've also developed innovative technologies like Verified Fan
    and Smart Queue to weed out bots and bad actors and we
    supported the 2016 BOTS Act, which made bots illegal.
        Despite the massive investments we've made to help fans get
    fair access to tickets, we know this alone will not solve the
    problem which is why we strongly support bolstering the BOTS
    Act with more rigorous enforcement.
        Second, speculative ticketing, which is when professional
    sellers offer tickets they don't have and may never have, is
    commonplace. Earlier this month The Rolling Stones announced
    their tour dates and within minutes, before the band had even
    released those tickets to the general public, hundreds of spec
    tickets were available on other resale marketplaces, some
    upwards of $3,000, or 7 times face value. Ticketmaster's resale
    policy prohibits spec tickets, we actively remove them from our
    site, and we support mandated disclosures or banning the
    practice all together.
        Next, if you Google Rolling Stones tickets, you'll likely
    find official-looking ticket sites which are deceptive and
    misleading. These sites are actually fronts for resellers
    trying to trick fans into believing they're buying primary
    tickets when, in fact, what is being offered are inflated
    resale tickets. Ticketmaster bans and reports deceptive URLs
    and to ensure transparency on our marketplace, if we aren't the
    primary ticketer, we link to the official box office, a best
    practice we feel should be adopted industrywide.
        Last, what consumers may not know is that every ticket we
    sell is owned by the event organizer and artist's team or venue
    and not by Ticketmaster. Event organizers determine pricing,
    fee structures, and on-sale strategies. Then we support and
    implement those decisions. What everyone does know is that
    their total ticket price is the face-plus fees but that total
    should be disclosed from the outset, not at the end of the
    purchase process, which is why we support legislative,
    mandating, industrywide all-in pricing and believe that there
    should be robust enforcement of this requirement.
        As a leader of our company, I work alongside more than
    3,000 dedicated employees who work tirelessly every day to
    provide a safe, reliable, and transparent experience for our
    fans and this is why we are here today, to share our approach
    and challenges, to hear your perspective, and to work together
    to identify legislative and regulatory solutions to improve the
    ticketing ecosystem.
        I truly appreciate the opportunity to discuss these
    important issues and look forward to answering your questions.
    Thank you.
        [The prepared statement of Ms. Howe follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeGette. I thank you, Ms. Howe.
        I'm now pleased to recognize Mr. Perez for 5 minutes. Mr.
    Perez.

                        TESTIMONY OF BRYAN PEREZ

        Mr. Perez. Good morning, Chair DeGette.
        Ms. DeGette. Your microphone.
        Mr. Perez. Good morning. Thank you.
        Chair DeGette, Chairman Pallone, Ranking Members Guthrie
    and Walden, and other distinguished members, my name is Brian
    Perez and I am the CEO of AXS, a wholly owned subsidiary of
    Anschutz Entertainment Group, a leading sports and live
    entertainment company.
        AEG is a privately held company that operates domestically
    and internationally across a number of segments within the live
    entertainment and sports industry, including AEG Real Estate,
    AEG Sports, AEG Presents, and AXS Ticketing.
        AXS Ticketing provides primary and resale ticketing
    technology and services as the official authorized agent of
    various sports teams, venues, and live event promoters. I've
    been in the live entertainment business for over 20 years,
    having previously held positions at the NBA, Live Nation, the
    NHL's Dallas Stars, and Madison Square Garden.
        I'd like to thank you for inviting me to testify at today's
    hearing, examining policies and practices in the live event
    ticketing industry. Our industry is one of world-class
    experiences and memories of a lifetime, and I appreciate the
    opportunity to provide our perspective on a business that
    impacts so many of your constituents. We are fortunate to work
    in this business, to be able to play some small part in these
    magical moments, and we fight every day to help our clients
    create a better fan experience because we are fans, too.
        And I applaud the initiative of this hearing as I believe
    our shared goal is to get tickets into the hands of real fans
    at fair prices in a seamless, secure, and clear purchase
    experience.
        Unfortunately, many of these events are limited in capacity
    and face excess demand and, even though artists often try to
    set a fair price that is available to fans from all walks of
    life, they are frustrated in their efforts by bad actors
    chasing profits, often using illegal practices to purchase
    tickets before the honest fan has a chance.
        When paired with two of the most insidious practices to
    arise in our industry recently, speculative tickets and
    deceptive websites, it's no wonder that the consumer is left
    feeling disillusioned and out of luck. I'm thankful for the
    opportunity today to discuss how we're using technology in
    business practices to combat these bad actors.
        I also believe that thoughtful legislation with aggressive
    enforcement can have a positive impact on curbing these
    practices. Thoughtful legislation and aggressive enforcement
    can also help level the playing field between primary and
    resale marketplaces, ensuring that we are all playing by the
    same rules, so that fans are more easily able to understand
    their options and the prices they are paying.
        We support all-in pricing at the outset of the purchase
    transaction as long as it is applied equally and uniformly to
    all ticket sellers and marketplaces. As we have seen, if there
    is any wiggle room, bad actors will find a way to exploit it
    against the innocent consumer in the name of profiteering.
        Once again, thank you for the opportunity to testify before
    the committee today and for your assistance in helping fans
    attend events at a fair price and in a fair manner. I look
    forward to answering your questions. And as the committee
    grapples with legislative solutions, AEG looks forward to being
    engaged in that process with you.
        Thank you.
        [The prepared statement of Mr. Perez follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeGette. I thank the gentleman.
        The Chair now recognizes Ms. Burns for 5 minutes for an
    opening statement.

                      TESTIMONY OF STEPHANIE BURNS

        Ms. Burns. Good morning.
        Chair DeGette, Chairman Pallone, Ranking Member Guthrie,
    and members of the subcommittee. Thank you for the opportunity
    to participate in this important hearing.
        StubHub shares the subcommittee's commitment to consumer
    protections and applauds your effort to look at the industry
    holistically on behalf of fans. StubHub was founded in 2000 and
    revolutionized secondary ticket sales by providing fans a safe,
    transparent, and trusted marketplace to buy and sell tickets
    online.
        StubHub has more than 130 partnerships with major sports
    leagues, universities, teams, venues, and artists around the
    world. Every transaction on StubHub is protected by our
    industry-leading FanProtect guarantee. In those rare instances
    when there is something wrong with the ticket purchased on
    StubHub, we will provide a comparable or better replacement
    ticket or, in the limited instances where that is not possible,
    we provide a full refund inclusive of fees. StubHub's
    FanProtect guarantee is the hallmark of our business, and it is
    why we have earned the trust of fans.
        Our mission is to connect fans to the joy of live events. A
    fair, secure, and competitive ticket marketplace is in the best
    interest of fans. In recent years our mission has been
    complicated by anticompetitive and anticonsumer practices. Many
    of these issues were identified by the committee during its
    investigation. I'll touch on three of these issues today,
    including transferability, transparency, and deceptive URLs.
        First and most importantly for consumers is
    transferability. Fans should always have the option to purchase
    a freely transferable ticket at the initial point of sale.
    Primary ticket issuers are using terms and conditions in
    technology to place downstream restrictions on the tickets that
    fans have rightfully purchased. With ticket restrictions,
    ticket issuers can single-handedly eliminate consumer choice
    and foreclose competition.
        For over three decades, Ticketmaster has been a dominant
    primary ticket issuer, accounting for approximately 80 percent
    of tickets sold. What you may not realize is that Ticketmaster
    is also a prominent secondary ticket resale platform.
    Ticketmaster is increasingly using its dominance in primary
    ticketing to extend its dominance to secondary ticket sales,
    which harms consumers. Here's how.
        Through its SafeTix technology, Ticketmaster is able to
    disable ticket transferability completely or limit
    transferability solely to its proprietary platforms.
    Ticketmaster is using this technology to force consumers who
    purchase resale tickets on competing sites to complete the
    transaction within their own app. This means that consumers who
    elect to buy tickets on StubHub are forced to register with
    Ticketmaster, download the Ticketmaster app, and provide their
    personal data to Ticketmaster to receive their tickets. This
    practice is a blatant data grab. It has been reported that
    Ticketmaster will apply SafeTix technology to all of its ticket
    sales by 2021. This is why Congress must act now.
        Secondly, transparency. Bots are often blamed as the reason
    why fans have difficult accessing tickets. Thankfully Congress
    addressed this issue in the 2016 BOTS Act. StubHub proudly
    supported this effort. Bots are not the only reason why fans
    have difficult accessing tickets. In fact, large percentages of
    tickets are never made available to sale to the general public.
    According to a report by the New York Attorney General's office
    in 2016, an average of 54 percent of tickets are held back for
    events.
        The average number of tickets made available to the public
    falls to 25 percent for top concerts and was noted to be as low
    as 12 percent for one concert at Madison Square Garden. In some
    instances, tickets are held back from the initial on-sale,
    gradually released, and often dynamically priced to reflect the
    current market rate, which may be higher than the original on-
    sale. Consumers deserve to know that ticket issuers are
    manipulating the release of ticket supply, resulting in higher
    prices.
        Lastly, deceptive URLs. When you buy a ticket through
    StubHub, you buy it on StubHub.com. StubHub does not own or
    operate deceptive URLs, also known as white label sites. White
    labels are deceptive because they mislead consumers into
    believing they are affiliated with the venue, artist, or team
    when they are not. StubHub encourages the committee to
    investigate the fullest of harms associated with white label
    sites and stands ready to assist.
        StubHub is committed to partnering with policymakers and
    industry stakeholders to promote a safe, transparent, and
    competitive live event ticketing industry to benefit fans
    across the globe.
        Thank you again for the opportunity to testify today and
    for your consideration of our comments. I look forward to
    answering any questions you may have.
        [The prepared statement of Ms. Burns follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeGette. I thank you, Ms. Burns.
        The Chair is now pleased to recognize Mr. Fitts for 5
    minutes.

                        TESTIMONY OF RYAN FITTS

        Mr. Fitts. Good morning.
        Chair DeGette, Ranking Member Guthrie, and members of the
    committee, thank you for the opportunity to appear today on
    behalf of Vivid Seats.
        Ms. DeGette. Mr. Fitts, I'm also going to ask to you move
    the microphone close. Thanks.
        Mr. Fitts. Those of us fortunate enough to work at Vivid
    Seats aren't just employees. We're fans as well, and the fan
    experience is at the center of everything we do. We are
    committed to working with you to foster innovation, promote
    competition, protect fans in the ticket marketplace. That is
    why we are pleased to announce our support for proposals that
    would prohibit undisclosed speculative ticket sales, prohibit
    deceptive marketing practices by white label websites, and
    require upfront, all-in pricing at a level playing field.
        And, significantly, we believe that the cornerstone of any
    congressional action in this industry must focus on protecting
    fans' rights to buy and sell tickets, when, where, and how they
    wish. This essential fan protection, known as transferability,
    has already been enacted by Colorado and by other States and no
    State has taken this right away. Importantly, it's opposed only
    by primary ticket sellers with market power who are trying to
    tighten their grip on tickets by restricting transferability
    which would leave fans with fewer choices and higher prices.
        The ticketing marketplace today is a tale of two channels,
    a resale channel that has seen the vibrant competition and
    progress and a primary channel that has not. Vivid Seats,
    operates in the resale channel. I would like to take just a
    minute to note how far we have come.
        As I'm sure many of you will remember, the resale market
    looked very different before Vivid Seats and companies like it
    came on the scene. Back then fans who were not fortunate enough
    to get a ticket through the primary seller had no safe and
    convenient way to obtain tickets, and fans who had tickets but
    could not use them had no safe and convenient way to sell them.
        Many fans had to resort to unsecured channels like
    unverified Internet listings or back alley sales where
    counterfeit tickets were all too common. I remember back in the
    nineties trying to buy Cubs tickets on a street corner, never
    able to compare choices and always worried I was being sold a
    fake ticket. Vivid Seats was created to solve this problem.
        Today, if fans want to buy a ticket at the last minute for
    an event that's otherwise sold out, our platform allows them to
    do. If fans have tickets that they cannot use, maybe something
    came up at work on a sudden illness, fans can sell those
    tickets on our platform and recover their costs. And every
    ticket sold on our platform is covered with a hundred percent
    industry-leading buyer guarantee.
        We promise a valid ticket delivered on time and as
    described or your money back. If a fan has any questions or
    encounters any issues, we'll quickly provide a response from
    our 300-person call center that typically connects fans with
    live support in less than a minute.
        We're very proud that Newsweek recently named us to its
    list of America's best companies for customer service, ranking
    us No. 1 in the ticketing industry, and we're also proud to
    have been chosen as the official partner for a host of well-
    known teams and brands including ESPN, the University of
    Colorado, the LA Clippers, the Chicago Bears, and many more.
        Today Visit Seats competes vigorously in a vibrant
    secondary ticket channel which includes many of the companies
    represented on the panel with me today, and let me be clear. We
    love competition. It challenges us all to innovate and to
    strive to provide fans the best value. At Vivid Seats we think
    of new ways to rise to this channel every single day.
        The scene is different in the primary channel, where only
    one company wields extensive control. That kind of market power
    can be abused in ways that hurt fans. Fans who try to purchase
    tickets from the primary seller often find that sales are
    limited to a short on-sale period with limited seating options
    typically held weeks or months in advance of the event.
        Fans are hurt when the primary seller restricts the
    transferability of tickets. As is the case with most property,
    a ticket belongs to the fan who holds it. They should be able
    to transfer that ticket on the platform of their choice. By
    restricting transferability, primary sellers exert even more
    control over the marketplace, essentially mandating that
    tickets become available from one source and one source only.
        Understanding the threat, the transferability restrictions
    posed for consumers, states including Colorado, Connecticut,
    Illinois, New York, Virginia, and Utah have enacted pro-
    consumer laws guaranteeing fans the right to resell tickets. We
    urge Congress to do the same.
        I appreciate the opportunity to participate in this
    hearing, and Vivid Seats looks forward to working with Congress
    to create the best experiences possible for fans.
        Thank you.
        [The prepared statement of Mr. Fitts follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeGette. I thank you, Mr. Fitts.
        The Chair now recognizes Mr. Vaccaro for 5 minutes.

                        TESTIMONY OF DON VACCARO

        Mr. Vaccaro. Good morning, Chairman DeGette, Ranking Member
    Guthrie, and distinguished members of the subcommittee. My name
    is Don Vaccaro, and I am the chief executive officer of Ticket
    Network. I thank you for inviting me today to share information
    about our company and the ticketing industry.
        Consumers deserve fair and equitable access to live
    entertainment events but face increasing difficulty in finding
    them. In response to the committee's questions, we have
    outlined a number of issues that exist and proposed remedies to
    fix them. They can be summarized in three key needs:
    Transferability, disclosure, and freedom. When tickets go on
    sale, there's nothing about the process that is clear for
    consumers. For starters, the supposed on-sale date for the
    general public is far from the first day tickets are available.
        Presales for various groups are spread throughout the
    ticket process. Often huge portions of unpurchased tickets are
    hidden, creating the illusion of scarcity during both presales
    and general on-sales.
        Consumers' fear of missing out are triggered when in really
    there are thousands of additional tickets waiting to be posted.
    These practices deceive consumers about ticket availability and
    keep prices high. These held-back tickets are dripped into the
    regular market down the road or sold directly through secondary
    websites.
        The lack of transparency in the sales process is the
    biggest factor contributing to price inflation and ticketing.
    Clear disclosure of ticket prices and fees are hard to come by,
    both on the primary and secondary market.
        Primary sellers often ply dynamic prices that move up
    during periods of high demand in tandem with false scarcity of
    inventory. This means that very few consumers have any hope of
    securing tickets at the published face value. Those prices are
    subject to enormous undisclosed fees that draw the overwhelming
    majority of consumer complaints, as evidenced by submissions to
    the FTC in advance of their hearing on tickets in June 2019.
    Which, according to our sample, more than 85 percent of the
    consumers' main issue was hidden fees, extra charges, and
    deceptive price advertising. The next largest issue was floor
    pricing and transferability.
        Some websites impose floor prices and coordinate those with
    sellers. Those floors artificially inflate prices and harm
    consumers who bought tickets and can no longer attend.
        FTC Commissioner Slaughter gave clear direction to ticket
    sellers to disclose fees up front or the FTC would intervene.
    We heeded her warning. Ticket Network has never allowed floor
    pricing and is leading the way in developing retail websites
    that don't trick consumers using high and hidden fees.
        Ninety-nine percent of our retail websites, we offer
    consumers the option to view all-in prices including fees
    before any personal viable information is consumed. We also
    have approximately 30 percent of our websites charge no service
    fees at all to the consumer and it's baked in, giving consumers
    a true transparent solution.
        We believe that this model is a model for the industry. We
    also believe that there's no necessity for legislation for
    folks in this industry to do the right thing. We can do it now.
        But perhaps the most egregious consumer abuse are systems
    that restrict the availability for consumers to transfer and
    resale tickets while simultaneously harboring an enormous
    amount of consumer data to sell to marketers and suppressing
    the ability of some classes of consumers from even
    participating in the process.
        In summary, there are several commonsense measures that can
    vastly improve the customer experience. Transferability,
    transparency, and disclosure are the keys, rather than the
    ever-increasing concentration of market power in this
    individual in the hands of a few bad actors.
        Thankfully there's a proposed solution out there. The BOSS
    Act from Representative Pallone, Pascrell, and Senator
    Blumenthal, on balance, it protects competition and takes vital
    steps for a more consumer-friendly experience and that's
    something we're striving for.
        And just to echo, it's all about the consumers, hopefully.
    It's not about us. It's what's best for the consumers that's
    going to make this industry better.
        Thank you.
        [The prepared statement of Mr. Vaccaro follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeGette. Thank you, Mr. Vaccaro.
        The Chair now recognizes Mr. Choti for 5 minutes.

                         TESTIMONY OF JOE CHOTI

        Mr. Choti. Good morning, Madam Chair and distinguished
    members of the committee. My name is Joe Choti, and I'm the
    chief executive officer and president of Tickets.com.
        I appreciate the opportunity to participate in today's
    hearing and contribute to the committee's efforts to improve
    the transparency and ensure fairness for our consumers in live
    event ticketing industry.
        Tickets.com is a technology company whose core product is
    the primary ticketing platform known as ProVenue. ProVenue
    serves as the core of a comprehensive suite of products and
    services that are utilized by over 250 United States client
    organizations that sell primary tickets, their primary tickets,
    on their own brand in their own box office and through online
    measures.
        While client organizations solely establish the policies
    and practices for a ticket sold through ProVenue, Tickets.com
    provides an array of technological features and functionality
    that allows venues to create events, establish ticket
    quantities, create and adjust pricing, list availability, and
    establish and display fees, all designed to enhance the
    patrons' live event ticketing experiences that can be utilized
    to address consumer protection concerns identified at this
    morning's committee.
        Tickets.com is constantly striving to improve and innovate
    patrons' live event ticketing experiences. We look forward to
    working with the committee towards our mutual goals. Hopefully,
    today's panel can be a step forward in that direction. I thank
    you for the opportunity to testify, and I look forward to your
    questions later on this morning.
        [The prepared statement of Mr. Choti follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeGette. I thank the gentleman.
        It's now time for members to ask you questions, and the
    Chair will recognize herself for five minutes.
        Ms. Burns, the 2016 New York Attorney General report that
    you referenced in your testimony found that the industry's use
    of holdbacks and presales restrict consumers' access to
    tickets. In fact, for some popular concerts, an average of 54
    percent of tickets were held back for industry insiders, fan
    clubs, credit card presales, artists, and other sources,
    according to the report.
        In your testimony, you said that ticket holdbacks are a
    major contributor to the limited number of face-value tickets
    available to the general public.
        If you can tell me, Ms. Burns, very briefly, how prevalent
    are those hold banks in the ticketing industry and why should
    consumers care about them?
        Ms. Burns. Well, the holdbacks are an issue in our industry
    because it limits supply.
        Ms. DeGette. Right. How prevalent are they?
        Ms. Burns. They're prevalent. Just in terms of how
    prevalent, I couldn't give you a figure but they're incredibly
    prevalent. It's a common practice of primary ticket issuers,
    but it's an issue for consumers because it limits supply.
        Ms. DeGette. Right.
        Ms. Burns. Right? And when you have limited supply and you
    have especially for events that are high in demand, it creates
    a false sense of scarcity and over time, as those tickets are
    trickled out, can result in higher prices for fans than if they
    were originally offered just all at once.
        It also limits access to fans who, you know, you want to
    purchase those tickets and the lack of transparency is just,
    you know, an issue in the industry in general.
        Ms. DeGette. Thank you.
        Ms. Howe, from your--from your perspective, how many of the
    concerts that are or the events that you sell do you have the
    holdbacks in the range of 54 percent, that type of range?
        Ms. Howe. Thank you for the question, Chair DeGette.
        Let me clarify some misconceptions. I want to try to tease
    apart holds from presales for a minute. True holds, which are
    effectively tickets that the artist is holding back for friends
    and family, VIP, and in some cases promotions, are single
    digits. There's no incentive for the artist to want to hold
    that inventory back. When they're going on sale and 90 percent
    of their marketing dollars are being spent at the on-sale, they
    want to get that inventory out there.
        Ms. DeGette. So you just don't agree with what the----
        Ms. Howe. I don't agree respectfully.
        Ms. DeGette. OK. I want to go back to you, Ms. Burns,
    because you talked about ticket transferability and what you
    said in your written testimony is arguments in support of
    transfer restrictions was a smoke screen. Can you tell me why
    that you hold that--why that's your perspective?
        Ms. Burns. Yes. So I believe what you may be referring to
    is the argument of fraud being used as a justification for
    limits on transferability. We believe that's a smoke screen
    because, if you look at the incidents of fraud, it's actually
    quite low in the ticketing industry, especially as we move
    towards mobile ticketing.
        So, it's really the issue here is using technology really
    to hold consumers captive when they purchase a ticket so that
    if they want to resell that ticket, they're forced to do so
    through the platform or the mobile system of the primary
    issuer.
        Ms. DeGette. Thank you.
        And Ms. Howe, what's your perspective on that?
        Ms. Howe. If you believe that five million fraudulent
    tickets a year are low, we would disagree with that.
        The issue around transferability is--let me clarify. This
    is a very small percentage of events that use nontransferable
    tickets today. When it's used, it is used for a very consumer-
    friendly practice which is to get tickets into the hands of
    real fans at below-market prices. So Pearl Jam most recently,
    many of you are familiar with, is using this and what we're
    seeing, if you look at those States that allow artists to
    restrict transfer, Pearl Jam is selling a 98-dollar ticket, 5-
    dollar charitable fee, and there's virtually no inventory on
    the resale market.
        In those two States, New York and Colorado, where they've
    pulled that right away from the artist, you're seeing thousands
    of tickets on the secondary market for $7,000. So----
        Ms. DeGette. OK. Thank you. I have just a few minutes left,
    and I have one more question for everybody.
        Which of your--do any of your businesses sell these white
    label tickets, engage in this? Let the record reflect everybody
    has--oh, Mr. Vaccaro.
        Mr. Vaccaro. I apologize. We have multiple definitions of
    what a white label site is.
        Ms. DeGette. You got to turn your mike on.
        Mr. Vaccaro. I apologize. We have multiple different
    definitions of what a white label site is. I can go into it
    with you but basically, we allow consumers, as well as other
    folks here, to sell tickets on a website that's branded to
    them.
        Ms. DeGette. OK. Would you agree that we need more
    disclosure of these sites so consumers know where they're
    buying their tickets?
        Mr. Vaccaro. I would answer that----
        Ms. DeGette. You just said you support this bill.
        Mr. Vaccaro. I supported the bill and I think we have
    enough and I think the disclosures comply with what the FTC
    said and I'll--
        Ms. DeGette. OK. I'm out of time. Thanks.
        Does everybody else agree? Just--does anybody disagree that
    we need more controls on these white label sites? No. OK.
    Everybody agrees.
        Mr. Guthrie, you're recognized for 5 minutes.
        Mr. Guthrie. Thank you very much. I appreciate the ranking
    member of the full committee thinking I'm too young to have
    seen Elvis, but that was 1975. I have a question----
        Ms. DeGette. End of his career----
        Mr. Guthrie. End of--yes, it was 1975, a couple of years
    before he passed unfortunately.
        Can you briefly describe, each of you--and I only have a
    few minutes. So, I want to make sure I--so ``briefly'' is the
    right word--the type of business model. I know you have a
    primary market, secondary market, white label software, et
    cetera; what type of market you guys operate in and if any
    affiliates operate as the marketplace? I know Ticketmaster's in
    this category. I don't know if the others--I know, Mr. Choti,
    you might be but you have a primary and secondary and, if you
    do, how do those interact with each other?
        So Ms. Howe and then I'll go down the list----
        Ms. Howe. Correct. Thank you for your question. We have a
    primary market. The business models, we compete for the
    exclusive rights to ticket a venue and the fees which are
    shared and split with the venue, go to providing an important
    service which is protecting our consumers in the marketplace
    and making sure we can get them in safely.
        We also compete in the secondary market. We are a number
    three player. So we have a much smaller share of secondary
    market, and we got into that because we thought it was
    important for us to be able to provide a safe and transparent
    way for consumers to buy all tickets, both primary and
    secondary.
        Mr. Guthrie. OK. Mr. Perez.
        Mr. Perez. Similar to Ticketmaster, we operate in the
    primary segment where we're the authorized agent for the
    initial release of tickets for sports teams, venues, and event
    promoters. We also operate a resale platform that's integrated
    with the primary. So all tickets that are sold on our resale
    platform are ones that we've issued originally. So they're
    verified, canceled, and reissued directly to the purchaser.
        Mr. Guthrie. OK. Ms. Burns.
        Ms. Burns. We are at our core a marketplace, so a secondary
    ticketing marketplace, and we have relationships with--where
    we're the official secondary partner for leagues, teams.
        We also have a primary business. It's a very small portion
    of our business. We have experienced challenges with trying to
    break into primary ticketing when we're up against a competitor
    that has an 80 percent market share.
        Mr. Guthrie. OK. Mr. Fitts.
        Mr. Fitts. We operate a resale marketplace called
    vividseats.com where buyers and sellers are put together to vie
    for tickets. We offer a wide variety, and people can compete on
    prices and understand what the full amount inventory available
    on resource is.
        We also offer a technology solution called Ticket
    Fulfillment Services which sells fulfillment solutions to
    companies that want to provide tickets to their consumers such
    as Capital One, such as Groupon, American Airlines, and Caesars
    Entertainment.
        Mr. Guthrie. Thanks. So, Mr. Vaccaro, just to give you a
    chance to answer more of the question more because none of them
    previously did. The white label, so you were talking about how
    you have branded.
        White label has a lot of different definitions. It doesn't
    necessarily mean bad. So if you have a chance to talk about
    your business practice in that area, if you can turn the mic. I
    am sorry.
        Mr. Vaccaro. Thank you. For the Armed Forces, we have a
    website called armedforcestravel.com. So what we do is we power
    that engine which is owned by the government, to give military
    members tickets with no service charges and no shipping fees.
    OK. So we're the official provider for them. We provide them
    that website.
        I was hearing about the other folks here and anyone who
    wants a website we will help them or we would help them out
    with the back end, providing them fulfillment services for
    those websites. Each deal is different. Some people market
    their own websites. Some people we provide more functionality
    to and less.
        But, you know, just to be clear, I think a lot of other
    folks here might be more involved in white label type websites
    than they're properly communicating.
        Mr. Guthrie. OK. Thank you.
        And Mr. Choti.
        Mr. Choti. We're a technology company that focuses on the
    primary market. We provide a solution for venues to, you know,
    create events, create configurations for those events,
    establish ticket quantities, adjust and modify pricing of
    tickets, list availability, and establish fees, fees and how
    those fees are applied.
        Mr. Guthrie. OK. I'll start with you and go backward then.
    So, fees, so how do you establish--who determines the fees, how
    do you establish the fees, and what are the fees used for?
        Mr. Choti. Again we're a technology platform, and we give
    the tools and the functionality to our venues and decide how
    and where and when they want to invoke certain pieces of
    functionality.
        Mr. Guthrie. OK. Mr. Vaccaro, how do y'all determine fees?
        Mr. Vaccaro. On the sites that we control, we determine
    fees by what the others in the marketplace are charging to
    match the fees and displays as close to them and return, get a
    return on investment for our marketing dollars.
        So all the money and fees basically goes to marketing.
        Mr. Guthrie. OK. Mr. Fitts, I don't know if I'll have time
    to get all the way down but we'll try.
        Mr. Fitts. In resale, the cost has two components, the base
    price which is set by the seller and not by us and the fee
    which we assess and the fee is used to pay for the call center
    I described in my opening statement----
        Mr. Guthrie. How do you determine the fees? How do y'all
    determine----
        Mr. Fitts. It's market competition. So it's subject to
    discipline by the market. If there's a lower price, we have to
    match it.
        Mr. Guthrie. OK. I'm out of time but Ms. Burns she'll let
    you finish if you'll be brief, each one of you.
        Ms. Burns. OK. We are the marketplace. So sellers determine
    the prices of tickets. As Mr. Fitts explained, there's two
    components to pricing. There are the price of the ticket and
    the fees we charge. Because we're a marketplace, the sellers
    determine the price of the tickets.
        Mr. Guthrie. If your fee's too high, people aren't going to
    use your site.
        Mr. Perez. Fees on our platform, both primary and resale,
    are set by the client, and they're usually determined by market
    analysis.
        Mr. Guthrie. Ms. Howe?
        Ms. Howe. Similar to Mr. Perez, fees are determined with
    the event organizer, and we share in a portion of those fees.
        Mr. Guthrie. Thank you. I appreciate the indulgence of the
    Chair, and I yield back.
        Ms. DeGette. The Chair now recognizes the chairman of the
    full committee, Mr. Pallone, for 5 minutes.
        The Chairman. Thank you, Madam Chair.
        I'm particularly concerned by the hidden fees that the
    ticketing industry charges American consumers at the end very
    end of the purchase process, and we're all familiar with this:
    You search for a ticket online, and one price is initially
    displayed, but, when you go to check out, hefty fees are added,
    and the final price is much higher than the original price
    shown.
        There was a 2016 report by the National Economic Council
    that stated, I quote: At their worst, such fees can be
    fraudulent or deceptive; at a minimum, they make prices
    unclear, hinder effective consumer decisionmaking, and dull the
    competitive process.
        So let me start with Ms. Howe. In your written testimony,
    you stated, and I quote: Consumers should be able to see the
    total cost of their tickets, including all fees, at the
    beginning of the purchase price process, not only at the end.
        So let me ask you, Ms. Howe: How would providing the total
    ticket price at the beginning of the purchase process as
    opposed to the end benefit consumers?
        Ms. Howe. Thank you for your question, Chairman Pallone.
        We believe that providing full disclosure, not just the
    face value of the ticket, but the fees, will help aid a
    consumer in making the right decision. So, instead of getting
    so far down the purchase path, you should know upfront what
    you're paying for and where those fees are going.
        The Chairman. And how would--you further stated that
    requiring all live event ticketing marketplaces to move to all-
    in pricing would, and I quote, prevent price manipulation,
    provide transparency, and protect consumers.
        But is it Ticketmaster's position that it would support
    all-in pricing?
        Ms. Howe. Absolutely. We support it, but what we believe,
    it needs to be mandated and that all marketplaces need to
    comply.
        The Chairman. So, if--as a dominant player in the industry,
    if you voluntarily implemented this, I mean, you don't see that
    as being effective? You think it has to be mandated by law?
        Ms. Howe. It's a good question. The reason we don't believe
    it's going to be effective is it's confusing to consumers.
    Right now, yes, you need consumers to understand apples to
    apples, and, today, if you look at Ticketmaster and you go to
    another marketplace, that ticket may seem more expensive, but
    the other marketplaces are marking that down and putting fees
    as high as 40 to 50 percent on the back end. So they're making
    ill-uninformed decisions if you don't have apples to apples.
        The Chairman. OK.
        And let me ask Mr. Perez. I'd like to get your views on
    this issue of all-in pricing. In a briefing with the committee
    staff, I understand you told the committee that disclosure of a
    ticket's full price needs to occur as early in the purchase
    process as possible. So why is it important to provide the full
    ticket price to consumers upfront, and would you support a bill
    to mandate it?
        Mr. Perez. Thank you for the question, Chairman Pallone.
    Because of the customer confusion between the primary and the
    resale market, they are price shopping across for the same
    ticket inventory across multiple websites. And it's our belief
    that, with legislation that requires all of us to show the fees
    all in upfront, then people would be able to make informed
    decisions on the value and the cost of the ticket that they're
    purchasing.
        The Chairman. OK.
        And then let me finally ask Ms. Burns. I understand that
    Stubhub implemented all-in pricing from 2014 to 2015, but
    ultimately moved away from that model. Why did Stubhub move
    away from all-in pricing, and do you believe Stubhub's
    experience would have been different if other players in the
    industry had followed your lead?
        Ms. Burns. Yes. And I just want to make one clarification.
        The Chairman. Sure.
        Ms. Burns. We actually do show all-in pricing on our site
    today, and we allow it through search, as well as ticket-
    listing pages. Consumers have an optional view to search based
    on all-in pricing, so we leave it to the consumer, which we
    think is the right thing to do.
        But, to answer your question, the reason why we moved away
    from it is because it was confusing for consumers when we were
    offering all-in pricing and other ticketers were not because
    consumers just didn't understand that they were viewing prices
    that were inclusive of fees; they thought they were viewing
    prices that were exclusive of fees.
        So, for all-in pricing to work, we believe there needs to
    be clear guidelines, you know, clear requirements of what
    constitutes all-in pricing, as well as universal and consistent
    enforcement.
        The Chairman. OK. Well, I think it's critically important
    that consumers have complete information about how much they're
    going to spend on tickets at the beginning, not at the end. I
    think all three of you agree.
        So, going forward, I hope the industry will cooperate with
    us in our efforts to put the consumer first, and all of you
    said that you would support a mandate, and, Ms. Burns, I
    appreciate your adding that we have to be specific about what
    that means because I think that's important, too.
        Thank you.
        Thank you, Madam Chair.
        Ms. DeGette. I thank the gentleman.
        The Chair now recognizes Mr. Walden for 5 minutes.
        Mr. Walden. Thank you, Madam Chair.
        I've got a question for all the witnesses, and it is, who
    makes the decision as to whether or not tickets are
    transferable?
        Ms. Howe, can we just start with you and----
        Ms. Howe. Sure. Thank you for that question.
        The event organizer is making that decision, so it's the--
    --
        Mr. Walden. Right.
        Ms. Howe [continue]. Artist, the sports team, the----
        Mr. Walden. I understand.
        Ms. Howe. Broadway producer.
        Mr. Walden. Does everyone agree with that? Mr. Perez?
        Mr. Perez. In our experience, it's the artists themselves.
    It's not even the event organizer. We've never issued
    nontransferable tickets that weren't the direct request of an
    artist.
        Mr. Walden. All right. Ms. Burns? Does anybody disagree
    with this notion?
        Ms. Burns. I have a disagreement, actually. I think what's
    important in answering the question about transferability is,
    is the ticket transferable on any platform, or transferable
    only within the platform of the primary issuer? I think there
    is a key distinction there.
        Mr. Walden. All right.
        Ms. Burns. In the latter case, the primary issuer is
    actually making the choice to make that ticket nontransferable,
    meaning----
        Mr. Walden. Well----
        Ms. Burns [continue]. If it can only be sold on that
    primary issuer's platform----
        Mr. Walden. Oh.
        Ms. Burns [continue]. Then they are making the choice----
        Mr. Walden. Yes.
        Ms. Burns [continue]. That it's nontransferable.
        Mr. Walden. Ms. Howe, do you want to respond to that?
        Ms. Howe. Can I clarify that?
        Mr. Walden. Yes, sure.
        Ms. Howe. That's not accurate----
        Mr. Walden. Oh.
        Ms. Howe [continue]. For a couple of things. One is there
    are very few cases where transfer is restricted. We don't----
        Mr. Walden. What would those be?
        Ms. Howe [continue]. Make that decision. We don't make that
    decision. In the--there's only been a few since--and I just
    wanted to correct the record from the opening statements.
    SafeTix does not equal nontransferable tickets. So, yes, we've
    invested in digital tickets, but we've invested in that because
    we want to shut down the fraudulent ticket market. It does have
    the capability to restrict transfer. It has only been used in a
    couple of situations--Pearl Jam most recently, which I
    mentioned earlier--and, just on this Monday, we ticketed the
    Kobe Bryant Memorial Service, and his wishes were to make sure
    that--his family's wishes were to get those tickets at well-
    below-face market prices and do that in a way that didn't
    create a secondary market. All that money went to charity.
        So there are situations where restricted transfer is great
    for the consumer, and it's great for the content owner.
        Mr. Walden. All right. Anybody else wants to----
        Mr. Vaccaro. If I can just interject that Connecticut has a
    very pro-consumer law, and it's the venue that ultimately has
    responsibility for the transfer of the tickets. So the venue is
    the bad actor if you can't transfer the ticket, not the
    promoter or anything. And Connecticut's law requires that you
    be able to transfer the ticket without giving any personally
    identifiable information to the venue to transfer the ticket,
    regardless if the venue is located in Connecticut or out of
    State.
        Mr. Walden. All right. Mr. Fitts, you want to weigh in on
    that?
        Mr. Fitts. Yes. Thank you. Transferability means
    competition, right? So marketplaces should have to compete with
    one another for that ticket on the resale marketplace. If a
    ticket is transferable, it means that different marketplaces
    can offer it and compete about services, compete over fees. The
    danger with SafeTicket, which sounds like a nice product, but
    it has dangers that eventually that become a walled garden for
    only Ticketmaster to operate. That's the danger here, and
    that's why we need the BOSS Act to protect transferability.
        Mr. Walden. Do any of you oppose electronic ticketing? Just
    as a consumer, I kind of like that.
        Mr. Vaccaro. The only thing I oppose is when you mandate
    it--when you mandate it. For example, with the CCPA, it was
    mandated that, look, you need a mobile phone. You need an app.
        Mr. Walden. Right.
        Mr. Vaccaro. People came out that it was disenfranchising
    for people who didn't have it. Plus, a lot of the primaries
    came out that they gathered so much information from you,
    including your gender or change in gender, and they sold that
    information to marketers to help you market that. They gave you
    IP addresses of your customers. It's a very much concern with
    the military members. They also put in devices on those
    phones----
        Mr. Walden. Now, who was doing this?
        Mr. Vaccaro [continue]. On your location.
        Mr. Walden. Who was doing this?
        Mr. Vaccaro. Both AXS and Ticketmaster.
        Mr. Walden. Do either of you want to respond to that?
        Ms. Howe. Let me just clarify. Ticketmaster is not
    mandating the use of digital tickets.
        Mr. Walden. Right.
        Ms. Howe. It's our job to create the technology and let me
    give you some numbers. For the NFL, which was the first league
    to use SafeTix and digital ticketing at scale. There are some
    teams that have 95 percent digital tickets, and there are some
    that have 25 percent. That is a team decision; that's not a
    Ticketmaster decision.
        Mr. Walden. It's an option. OK. What about the information
    gathering and sale piece that he referenced?
        Ms. Howe. Sorry. Can you repeat----
        Mr. Walden. Everything from gender to IP addresses.
        Mr. Vaccaro. I can supply you all the documentation. I gave
    it to your committee.
        Mr. Walden. All right.
        Mr. Vaccaro. Your staff members. It was on their website.
    It all came apart because of the California Consumer
    Protection----
        Mr. Walden. All right.
        Mr. Vaccaro [continue]. Act, Privacy Act, and they're
    saying, what information do you disclose? And the amount of
    information, if you want to transfer a ticket, is enormous. So
    you, as a consumer, before you even buy your tickets, you pay a
    cost. If you want to do mobile only and nontransferable, you
    have to give them so much information that they, in turn, sell
    to marketplace.
        Mr. Walden. I just want her to be able to--and I'm out of
    time, but can you just----
        Ms. Howe. I'm sorry. That's not accurate, at least for
    Ticketmaster. I can't speak for other platforms. You're
    providing--the only information you're providing is your name,
    your phone number, and your email address to be able to receive
    transfer, and we cannot do anything with that data. The only
    thing we can do is troubleshoot and fulfill that ticket. We
    can't market. So that's at least how we do it on our platform.
        Mr. Walden. Thank you for letting them answer, Madam Chair.
    Thanks.
        Ms. DeGette. Thank you. The gentleman's time has expired.
        The Chair now recognizes the Chair of the Consumer
    Protection Subcommittee that will be considering the BOSS Act,
    Ms. Schakowsky.
        Ms. Schakowsky. Thank you, Madam Chair.
        Consumers continue to be negatively affected by practices
    occurring in the ticketing marketplace, and many of the
    practices have been well documented--some of you have mentioned
    some of the concerns--and have gone on for quite a while. I
    just want to go down the row and ask each of you, just yes or
    no, do you believe that we need more legislation to adequately
    protect consumers?
        Ms. Howe, I'll begin with you.
        Ms. Howe. Absolutely, we do.
        Mr. Perez. Yes, we do.
        Ms. Burns. Yes.
        Mr. Fitts. Yes, we do.
        Mr. Vaccaro. Yes, or enforcement of the current laws.
        Mr. Choti. Without question.
        Ms. Schakowsky. Or, or and?
        Mr. Vaccaro. Or.
        Mr. Choti. Without question.
        Ms. Schakowsky. So I think there is pretty much agreement
    here that we need to do something, and the plan is that we
    will.
        So now I want to hear firsthand from those in the industry
    about harms that impact consumers. Let me just ask, what do you
    believe are the most significant anticonsumer practices that
    are taking place in the industry? I don't have a lot of time.
    So, again, I'd like to go down the row, beginning with you, Ms.
    Howe. Your company, Ticketmaster, is the largest primary seller
    of tickets. You begin. What do you think?
        Ms. Howe. We're concerned about bots. Thirty billion bots
    blocked a year is preventing ticket consumers from getting
    access. We're concerned with speculative ticketing, deceptive
    websites, and the lack of proper resale disclosures for
    consumers.
        Ms. Schakowsky. Thank you.
        Mr. Perez?
        Mr. Perez. Bots, for sure, and deceptive websites, and
    speculative ticketing.
        Ms. Schakowsky. Ms. Burns?
        Ms. Burns. We think that ticket transferability reigns
    supreme. So anything that disables ticket transferability or
    anything that limits ticket transferability to a specific
    platform, that's harmful to consumers because it limits choice.
        Ms. Schakowsky. Thank you.
        Mr. Fitts?
        Mr. Fitts. Ticket transferability is the key issue facing
    the industry today. That's why States like Colorado have passed
    laws requiring that tickets be transferable. It's necessary for
    the consumer to be able to compete--I mean, to be able to see
    others compete for that ticket.
        Ms. Schakowsky. Thank you.
        Mr. Vaccaro?
        Mr. Vaccaro. Ticket transferability, data sharing, and
    floor pricing.
        Ms. Schakowsky. So you're the only one that has really
    raised the privacy issue, I think.
        Mr. Vaccaro. I think there is a lot of consumers who aren't
    aware of what came out, and there were articles with it. A lot
    of reasons why the other folks don't raise it is some of the
    other folks, as part of their thing, they actively sell all
    that data, and, contrary to what they said, I gave your staff
    the links.
        Ms. Schakowsky. OK.
        Mr. Vaccaro. It says: We market to this. We market--we sell
    your gender. They put it right in there. Your IP address----
        Ms. Schakowsky. I, heard that. Thank you.
        Mr. Vaccaro. OK.
        Ms. Schakowsky. OK. And Mr. Choti?
        Mr. Choti. Bots, deceptive websites, and data sharing and
    utilization. Our model is different than most models in the
    marketplace today, where our client, our venue's data, is their
    data, and we don't share that with any third party or
    ourselves.
        Ms. Schakowsky. Great. I'm going to ask Ms. Howe and Ms.
    Burns, but others, if there is time, can respond. The FTC has a
    role to play, or could play, and so I wanted to just ask you
    what the FTC has also held--held a workshop and what you think
    that the Federal Trade Commission can do to protect consumers.
    Ms. Howe?
        Ms. Howe. Thank you for the question.
        Most important thing is to enforce the 2016 BOTS Act. It is
    an arms race. We invest a lot of money, but without stronger
    enforcement, it's going to be very difficult to fundamentally
    solve that problem.
        Ms. Schakowsky. Ms. Burns? FTC.
        Ms. Burns. Yes, I agree with regard to the BOTS Act, which
    Stubhub was a strong supporter of, that more can be done with
    enforcement and I believe that's a cooperation between
    Congress, the FTC, and DOJ. Also believe the FTC can do more to
    support and maintain competition, healthy competition, within
    ticketing. It has enforcement authority there as well.
        Ms. Schakowsky. OK. Anybody else that wants to just briefly
    comment on the role of the regulator, Federal Trade Commission?
        Mr. Fitts?
        Mr. Fitts. If I may, the FTC should also be concerned with
    holdbacks and that practice, and they should take a look at
    that perhaps but also transferability and the ways that tickets
    are exchanged between exchanges.
        Ms. Schakowsky. Thank you.
        Mr. Vaccaro. I would--I would--just adding to that, I would
    say that Commissioner Slaughter from the FTC made one mandate.
    She either--said: People in this industry, either you fix the
    hidden prices, or the FTC will find a solution for you.
        That was the main mandate. I think we did it. I believe
    that Stubhub did it with the toggle. So now we have some
    players. Other ones haven't.
        Ms. Schakowsky. Thank you. My time is up, and I yield back.
    Thank you.
        Ms. DeGette. Thank the gentlelady.
        Chair now recognizes Mr. Burgess for 5 minutes.
        Mr. Burgess. Thank you.
        And I actually want to go back to something that Ranking
    Member Walden was talking about, and that is the issue on the
    issuing of digital tickets and moving to all digital tickets,
    and then how does the nondigital individual interface with the
    ticket-selling world?
        Mr. Fitts and Ms. Burns, maybe you can address that. Going
    to all--everyone has to buy their ticket on a smartphone, but
    there are still people out there who don't have the technology.
        Mr. Fitts. I'll take that. Yes. I mean, the problem with
    requiring a smartphone is it does eliminate individuals who
    don't have a smartphone from attending events. I think, without
    a paper option, that could, you know, foreclose people from
    attending. I think digital tickets could be a positive, but,
    again, there is a danger that transferability is shut off
    simply with the flip of a switch, and then you have a closed
    garden, a walled garden, and people aren't able to compete.
        Mr. Burgess. So Ms. Burns?
        Ms. Burns. I agree with that. I don't have anything to add
    there.
        Mr. Burgess. So, Ms. Howe, you looked like you wanted to
    say something.
        Ms. Howe. Yes. Let me just clarify. With digital tickets,
    it's always an option for a fan to get a paper ticket at the
    box office. So, if they don't have a smartphone, they can
    always work with customer service, and they can get that at the
    box service.
        Mr. Burgess. Yes, but then they've got to stand in line in
    the cold outside the ticket window, right? They should do it
    with a smartphone. OK.
        Mr. Vaccaro, you brought up an interesting point about the
    collection of digital data, and you brought up the California
    law and State law on privacy and how that is now beginning to
    impact--I guess for all of you, impact your business. Have you
    had any difficulty meeting the demands in the European side of
    things with the GDPR? Has that surfaced as an issue for any of
    you?
        Mr. Vaccaro. We comply with them. It was an issue. It was a
    cost to us. I think, ultimately consumers will benefit from it,
    and I think consumers are much more wary now about their data
    and what's it used for. So, as far as us as--no, we comply with
    it. We did it. It was expensive, but we did it.
        Mr. Burgess. Has anyone found difficulty with complying----
        Ms. Howe. No.
        Mr. Burgess [continue]. With either the California law of
    the GDPR? Yes, sir, Mr. Perez?
        Mr. Perez. No. In fact, GDPR is set up very well for
    compliance with the California law. And just for the record, we
    do not sell data to anyone. We provide the data to our venues
    so they can service all fans when they show up at the event,
    regardless of where they purchased the ticket. It's a ability
    to provide customer service. With paper tickets and PDF
    tickets, we have no idea who these people are, where they got
    the tickets, and we cannot help them, and that really pains us.
        Mr. Burgess. Let me just ask you a question, because
    privacy is going to be something that may--that the Energy and
    Commerce Committee writ large is going to have to deal with it.
    Does anyone have any thoughts and advice that you would give
    the committee when we're dealing with how to reconcile what's
    happening in California with the rest of the country? Is a
    national standard something that to which we should aspire?
        Mr. Vaccaro. I would say a national standard would make it
    much simpler on businesses that you don't have to comply with
    50 State laws on privacy, and there is an argument to be made
    that California's law gives an advantage over California
    businesses rather than out-of-state businesses because the way
    they apply the law. But, yes, you're right, a national
    standard, much easier for businesses to comply with rather than
    dealing with 50 different States.
        Mr. Burgess. Yes, it's always been my thesis that the
    Founders, when they wrote the Constitution, the Commerce Clause
    was written with the idea that eventually we'll get to a world
    of e-commerce where we want to be able to sell things across
    the several States without boundaries.
        Yes, Mr. Fitts?
        Mr. Fitts. I think, though, there is a privacy issue here
    in our industry, and that's a practice, I think, sometimes
    engaged in by primary marketplaces where, if a ticket is sold
    on my marketplace, it's digital, they require my customer to
    log into their marketplace to download the ticket. That creates
    a relationship that my customer didn't intend, and it's a
    forced transfer of PII. So, I mean, that's concerning. I look
    to the BOSS Act to address that.
        Mr. Burgess. And you think it would be addressed in the
    BOSS Act?
        Mr. Fitts. I think the language on that point could be a
    little stronger, but I think that--I see that as friction to
    transferability that exists right now, that should be
    eliminated.
        Mr. Burgess. I agree.
        I'll yield back, Madam Chair.
        Ms. DeGette. Thank the gentleman.
        Chair now recognizes the gentleman from California, Mr.
    Ruiz?
        Mr. Ruiz. It happens to me all the time.
        Thank you, and thank you to the witnesses that are here
    today.
        One of the primary economic drivers in my district is
    tourism: Palm Springs, California; Coachella Valley. People who
    fly into Palm Springs from around the country often will buy
    tickets to shows or concerts during their time in the Coachella
    Valley. Many of you may have heard of the Coachella and
    Stagecoach festivals that attract hundreds of thousands of
    people each year.
        Starting next year, tourists will have a new attraction: an
    NHL hockey team based in Palm Springs. When people visit my
    district for these events, they spend money at our local
    businesses and patronize our hotels and restaurants. I want to
    be sure that their experience is a good one, and that starts
    with the ticket-buying process.
        One practice that is particularly concerning to me is the
    use of deceptive white label websites. These ticketing websites
    deceive consumers into believing the websites are affiliated
    with a venue, team, or artist when, in fact, no such
    affiliation exists.
        Ms. Howe, in your testimony, you contended that, quote,
    some secondary marketplaces routinely use or work with these
    deceptive websites, unquote. How prevalent are deceptive white
    label websites and how are they harming consumers?
        Ms. Howe. Thank you for the question.
        Last year alone, we worked with Google and other ISPs to
    shut down over 30 of these deceptive websites, and it's
    incredibly misleading. They're posing as official websites of
    the venue, the artist, the team, and you're pushing a consumer
    to a secondary site oftentimes that has been----
        Mr. Ruiz. How prevalent are they?
        Ms. Howe. I don't know the exact number, but----
        Mr. Ruiz. And how would you say they harm consumers?
        Ms. Howe. They are--they're resell sites. So, when you're
    pushing--a consumer thinks they're buying from an official box
    office, an official team site, and you're posing as----
        Mr. Ruiz. And it costs more?
        Ms. Howe [continue]. A resell site, it costs more,
    absolutely.
        Mr. Ruiz. Thank you.
        Mr. Vaccaro, the FTC brought an action against your company
    in 2014, alleging that it licensed tools and services to
    clients who created websites that misrepresented affiliations
    with certain venues. For example, the FTC alleged that a
    TicketNetwork client created a web page that appeared to be
    affiliated with a Radio City Music Hall. According to the FTC's
    complaint, the client advertised the site as the, quote,
    official ticket source online, unquote, for Radio City Music
    Hall tickets even though the website had no affiliation with
    the venue.
        Mr. Vaccaro, your written testimony noted that
    TicketNetwork entered into a consent decree with the FTC that
    contains, quote, clear and concise rules, unquote, on how to
    operate white label websites that are not deceptive.
        Mr. Vaccaro, what are you doing to ensure that
    TicketNetwork's clients do not create websites that
    misrepresent an affiliation with the venue?
        Mr. Vaccaro. Thank you. That's great.
        The first thing we do is the FTC laid out some pretty clear
    and concise rules to follow: Don't use the word ``official.''
    There was----
        Mr. Ruiz. How are you implementing those recommendations?
        Mr. Vaccaro. We told any websites who buy that from us not
    to do it.
        Mr. Ruiz. Do you follow up and check with them?
        Mr. Vaccaro. We follow up as much as we can, but we also
    have affiliates----
        Mr. Ruiz. As much as you can, what does that mean? You
    don't, or you do?
        Mr. Vaccaro. We do follow up. I don't know the exact
    answer, the procedure of how we follow up or how we review each
    of them, but I can get back to you on that.
        Mr. Ruiz. OK. I think that will be important because that's
    what this whole topic is about.
        Mr. Fitts, I understand that your company also licenses
    tools and services to third-party ticketing websites. In your
    testimony, you described how Vivid Seats screens potential
    licenses and requires them to comply with the FTC's consent
    decree with TicketNetwork.
        Mr. Fitts, given these precautions, are you certain that
    your licensees are not engaged in deceptive white label
    practices?
        Mr. Fitts. We agree to----
        Mr. Ruiz. You've got to turn it on.
        Mr. Fitts. I'm sorry. I'm not on. We agree that false
    impressions left with consumers about affiliations does not
    exist.
        Mr. Ruiz. So how certain that--so you're pretty certain
    that your licensees are not engaged in these deceptive white
    label practices?
        Mr. Fitts. Exactly. Our licensees do not deceive anybody.
        Mr. Ruiz. Ms. Burns, do you believe the FTC is sufficiently
    deterring companies from engaging in deceptive white label
    practices, or do you think more needs to be done?
        Ms. Burns. I think the FTC has done a good job of working
    with the industry to crack down on white label sites. However,
    I think more can be done.
        Mr. Ruiz. Like what?
        Ms. Burns. Consistent policing, working with industry to
    identify them----
        Mr. Ruiz. OK.
        Ms. Burns [continue]. And taking swift action.
        Mr. Ruiz. All right. Mr. Choti, same question: Do you
    believe the FTC is sufficiently deterring companies from
    engaging in deceptive white label practices, or do you think
    more needs to be done?
        Mr. Choti. I think more needs to be done. I've seen a
    decrease in white label solutions out there. We as a ticketing
    company go out and routinely see if there are people with
    deceptive URLs and work with Google, likes of Google to have
    them shut down.
        Mr. Ruiz. Thank you. I yield back.
        Ms. DeGette. I'm sorry about that.
        Chair now recognizes the gentleman from Virginia for 5
    minutes.
        Mr. Griffith. Thank you, Madam Chair.
        In preparing for this hearing, Mr. Perez, my team had me
    visit ticketflipping.com. Not something I would ordinarily do,
    but this is a website that sells training materials to help
    people become ticket brokers. On the site, they sell a plug-in
    that gives a ticket broker the ability to know how many tickets
    are available for AXS, your company, events, and specific data
    about remaining tickets. It seems to me that this information
    must be pretty valuable to brokers if they are designing plug-
    ins to monitor sell rates on your website.
        What is the value of this information, and, in your
    opinion, is there a benefit to disclosure of this information
    by venues?
        Mr. Perez. In my opinion, there is no benefit of this
    disclosure to the consumer. I think that the brokers that are
    using that information are trying to gauge supply and demand so
    they can maximize profits, and what we're seeing now--when we
    talk about inventory disclosures, many of us on the panel today
    have moved to seat maps where we fully disclose all the seats
    available in a seat map.
        Almost instantly, we saw, when we did that, people scraping
    every single listing on our site, recreating a site that does
    not own any of those tickets at a higher price, and, when they
    close that transaction at a higher price, would come to our
    website and purchase the actual ticket.
        In our minds, that's complete and total deception and
    fraud, and so we're concerned that providing the bad actor and
    broker community a roadmap with how to maximum profits is going
    to harm consumers.
        Mr. Griffith. Well, what if you don't give them the actual
    seats, but you just tell them how many are available? In other
    words, you know, we still have 3,842 seats left? Does that--
    that--because I----
        Mr. Perez. The other--so----
        Mr. Griffith. As we've seen, I would like to see that
    information, too, because, if I'm trying to decide whether I
    want to buy now or wait until later--I'm not sure I can
    attend--that would help me decide whether I'm buying today or
    buying next week.
        Mr. Perez. Yes, correct.
        The other thing that we've seen is, as inventory gets low,
    there are a number of entities out there that, overnight, come
    in and scoop up all the tickets. So you'd be selling 10, 20
    tickets a day, and then, in one night, you'd sell 200 tickets,
    the show would be sold out, one entity would try and control
    those tickets and now artificially raise the resale market.
        So, again, we share--we have the same concern in that
    particular situation. I think what is probably easier to
    accomplish and more palpable for everybody is the total number
    of tickets at the outset----
        Mr. Griffith. Yes.
        Mr. Perez [continue]. And we talked about it earlier by the
    way of, for sports teams, we know how many seats are in the
    venue. For concerts, we know roughly how many seats are going
    to be available subject to production realities.
        Mr. Griffith. Do you all have the capability to monitor
    when somebody is selling the tickets for an upscale? And I
    think, Ms. Howe, you mentioned earlier some prices that was
    going on in Colorado. Can you all monitor what the increase in
    the price is over what it was at the--on the face value of a
    ticket? You can go ahead, either one of you.
        Mr. Perez. We try. There are so many websites out there
    that it's almost impossible to monitor every single one of
    them.
        Mr. Griffith. All right.
        Ms. Howe. That's right.
        Mr. Griffith. All right. Now, Ms. Howe, in ticketing, it
    seems consumer complaints hit a peak when they are unable to
    access tickets. How often--I think it would help the committee?
    How often do you have sellout events? How often does the demand
    exceed the supply?
        Ms. Howe. Thank you for the question.
        So, if you look at last year, there were about 60,000 music
    events. Only 30 percent of those sold out, and, if you look at
    the number that sold out within the first 24 hours, it was
    about 2.5 percent. So there is very, very high-demand events,
    but it's a relatively small percentage of the events.
        Mr. Griffith. And what--can you explain to us what
    technologies your company is using to try to develop to reduce
    the presence of bots when you're selling tickets to these
    events that are expected to be high-demand events?
        Ms. Howe. Absolutely. As I mentioned in my opening remarks,
    we're blocking three billion bots a month, and, this year, we
    expect to block close to 30 billion.
        We are doing a number of things. We are leveraging state-
    of-the-art technology to block bots on the perimeter of our
    marketplace, but we're also investing in smart, innovative
    products that are letting fans get to the front of the line--in
    front of both bots and professional brokers, so we're giving
    them fair access.
        Mr. Griffith. In those events, if people are willing to pay
    a higher price, why not have the face value be higher as well
    in the first place, and wouldn't that benefit the artists more?
        Ms. Howe. It's a great question, and we have a terrific
    product that we've launched a few years ago. It's a platinum
    product which effectively allows the artist to do exactly that.
    So, for those best seats in the house, if the artist wants to
    recapture that value instead of it going to a middleman,
    they're able to do that effectively.
        Mr. Griffith. All right. And I appreciate it, and I yield
    back.
        Thank you, Madam Chair.
        Ms. Howe. Thank you.
        Ms. DeGette. The Chair now recognizes the gentlelady from
    New Hampshire for 5 minutes.
        Ms. Kuster. Thank you very much, Madam Chair, and I
    appreciate all of you being here for this hearing today. I want
    to get back to the transferability question. I was just poised
    to do it when my colleague reclaimed his time, but, Mr. Fitts,
    proponents of placing restrictions on ticket transferability,
    have argued that those restrictions help keep ticket prices
    low, but, in your testimony, you argue that transferability
    restrictions, quote, would leave fans with fewer choices and
    higher prices.
        Do you think that proponents of transferability
    restrictions truly believe that these restrictions keep prices
    lower for consumers, or is there something more nefarious
    underlining this position?
        Mr. Fitts. I wouldn't necessarily characterize their
    testimony, but I would say that transferability leads to
    competition, and so, when a ticket is transferable, multiple
    marketplaces need to compete over it, and so that means doing
    things like having a 100 percent buyer guaranty, a call center
    available at extended hours. They have to compete for those
    issues.
        They also need to compete on price, of course, because, if
    a fee is too high in one market, it won't sell. So
    transferability breeds competition. The danger of the lack of
    transferability is it cuts it off and restricts it to one
    player.
        Ms. Kuster. Which would result in higher prices for
    consumers presumably?
        Mr. Fitts. Presumably, it could lead to higher prices and
    lower service levels.
        Ms. Kuster. And lower service. OK.
        Ms. Burns, beyond controlling ticket price, proponents of
    nontransferable tickets also contend these restrictions enhance
    event security and limit fraud, but in your testimony, you
    called these arguments, quote, a smokescreen designed to limit
    consumer choice.
        How prevalent is fraud in the secondary ticket marketplace,
    and why do you think concerns about fraud are a smokescreen or
    a bogus argument?
        Ms. Burns. I can't speak to numbers for the entire
    industry. I just know what the numbers are for Stubhub, and I
    can tell you they're incredibly low, far less than one-half of
    a percent of tickets subject to fraud on our site.
        So we believe it's a smokescreen as justification to hold
    the consumer captive, again, with the primary ticketer, who
    also has a secondary platform--if they want to transfer that
    ticket within the platform--again, I think it's important to
    distinguish between is the ticket nontransferable, or is it
    nontransferable outside the primary issuer's platform?
        But I think it's a smokescreen because the primary issuer
    doesn't do any background check on the buyer, right, nor do
    they even know who that buyer may be taking to an event as
    their guest. They could be taking multiple people, and their
    identity is unknown.
        So, again, it's why I think it's--it's an excuse, and it's
    not a valid justification.
        Ms. Kuster. Thank you.
        In addition to outright transfer prohibition, some ticket
    issuers permit resale, but only through certain processes. In
    its response to the committee, Stubhub stated Ticketmaster is
    increasingly requiring consumers who buy resale tickets on non-
    Ticketmaster sites, like Stubhub, to complete their purchase
    through Ticketmaster's website or app.
        Do you think this is a genuine privacy issue, or, again, do
    you think this workaround is just to capture your customer?
    What do you think the purpose of that is, and then we'll let
    others respond?
        Ms. Burns. Yes. I think it's an anticompetitive issue, but
    it raises a privacy issue in the process, right, because the
    consumer who purchases their ticket off Stubhub or any other
    platform, when Ticketmaster is the primary issuer, that
    consumer has to go through Stubhub in order to receive their--
    or--sorry--through Ticketmaster in order to receive their
    ticket, and, in that process, they download their app, they
    register an account, hand over their personal data. Yet, at the
    time of the purchase, they may have had no intention of doing
    any business of any sort with Ticketmaster.
        Ms. Kuster. And can I just guess as a consumer that, then,
    they get a flood of emails marketing to them from both Stubhub
    and now Ticketmaster as well?
        Ms. Burns. You would have to ask that question of my
    colleague here, Ms. Howe.
        Ms. Kuster. Anyone want to comment from Ticketmaster?
        Ms. Howe. I'm happy to comment.
        Ms. Kuster. Sure.
        Ms. Howe. When a ticket is--if a digital ticket is bought
    on another platform and fulfilled within Ticketmaster, we have
    no rights to market to that consumer. The only thing we can--
    the only information we can use is to fulfill that ticket and,
    if there are issues, customer service issues, that's how we use
    that information. We cannot market to that consumer. We cannot
    sell that data.
        Ms. Kuster. What's the information that you require at that
    second step?
        Ms. Howe. Name, phone number, email address.
        Ms. Kuster. OK. Thank you.
        I yield back.
        Ms. DeGette. Gentleman from New York is recognized for 5
    minutes.
        Mr. Tonko. Thank you, Madam Chair, and welcome to the
    panel.
        I'm proud of all of the work my home State of New York has
    done to address consumer harms in the ticketing industry. A
    2016 report by the New York attorney general found that brokers
    use illegal bots to seize large blocks of tickets. And I'm
    proud to have helped passed the BOTS Act in 2016, which made
    the use of ticket bots illegal. However, several of our
    witnesses' responses have indicated that bots still exist
    within the marketplace, so we must keep working to ensure
    illegal bots are not stealing tickets away from the public.
        But, in addition to bots, the report also found that
    consumers often lack access to tickets because many tickets are
    put on hold for industry insiders and presale events.
        So, Mr. Fitts, your response to the committee stated that--
    and I quote--perceived scarcity at the on-sale is not caused by
    bots. It is primarily caused by holdbacks engineered by the
    ticketing company that operates the on-sale process, close
    quote.
        Mr. Fitts, how serious of a problem are holdbacks, and why
    should consumers care about this practice?
        Mr. Fitts. Well, holdbacks are a concern for consumers
    because the consumer is asked to make a decision in a high-
    pressure situation on an on-sale for concert where they don't
    have full information. It's a very different thought if there
    is 80 tickets left versus 8,000. So that's holding back a key
    piece of information from the consumer that they could really
    use.
        And so, when they report as sold out, the consumer might
    not understand that there is more tickets coming later, and
    they may have paid a different price, but the sellout may not
    be legitimate.
        Mr. Tonko. We're hearing that some of it might--that
    holdbacks might be a vast minority of the tickets that go for
    sale. Is that true? I mean, the report also indicated that it
    might be as high as 50 percent.
        Mr. Fitts. Yes. I know that I've seen media coverage, like
    the Toronto Star, for example, that showed something much more
    extensive than the small percentage. So, based on that report,
    I disagree.
        Mr. Tonko. Ms. Burns, one way to address holdbacks is to
    increase transparency around ticket availability. In your
    testimony, you stated that this information will--and I quote--
    create a clearer picture of event accessibility and help to
    inform fans' decisions on if and when to buy tickets.
        How would increasing transparency around ticket
    availability help consumers?
        Ms. Burns. Because you would know how many tickets are
    available at the event, and it may inform your decision as to
    whether purchase at the on-sale or to wait.
        Mr. Tonko. Thank you.
        And, Ms. Burns, some have argued against disclosing
    information on ticket availability. For instance, Ticketmaster
    contends that disclosing this information would benefit brokers
    and bots by--again, quoting--making it easier for them to
    target supply and manipulate the market.
        So, Ms. Burns, do you buy this argument, or do you believe
    that we should err on the side of more disclosure?
        Ms. Burns. No. I think the argument is disingenuous in
    that, you know, the purpose of the holdback is, again, to
    create a scarcity of supply. So, you know, as tickets are
    trickled out over time, again, it's designed to maintain prices
    or potentially increase prices as you near the event.
        Mr. Tonko. Thank you.
        Mr. Vaccaro, you wrote in an op-ed in 2016 entitled ``More
    Transparency in Ticket Sales and No More Bots,'' in that piece,
    you argued in favor of disclosing ticket availability and
    stated, and I quote: If consumers knew the truth, they would no
    longer be fans.
        So why should there be more transparency surrounding ticket
    availability, and what types of disclosures would be most
    helpful for consumers?
        Mr. Vaccaro. So I'm not an economist, and I don't pretend
    to be, but I know that, when I speak to them, they say many
    industries do a similar thing: They create a scarcity of
    supply, which effectively moves a supply curve to the left,
    which raises the equilibrium price, all right. So a lot of
    monopolies do that. A lot of other people do that by creating
    that scarcity of supply.
        And when you do those multiple presales, you only see a few
    amounts of tickets, a lot of people don't even realize how many
    people in the--are in the presale. So you manipulate consumers
    to think there is a scarcity; they buy at higher numbers.
    That's why, over time, ticket prices are going down; they're
    not going up.
        Mr. Tonko. And, with the holdbacks issue, is it as large a
    number of tickets as some have reported, or is it a very slight
    number? Is it--can it reach 50 percent?
        Mr. Vaccaro. I would say it could--well, let me clarify
    that because I think it's an important distinction to make. In
    most sports teams, they disclose the amounts of tickets, all
    right? The real issue that we're really talking about here is
    more or less concerts, OK.
        So, in concerts, it is amazing not only how many tickets
    they hold back, but there is also venues that have unmanifested
    seats that they sell that aren't even available to the public
    that are unmanifested. So the holdback number is even higher
    than what insiders report because they don't even count the
    nonmanifested tickets as tickets that are going on sale.
        Mr. Tonko. So it can approach 50 percent?
        Mr. Vaccaro. Yes.
        Mr. Tonko. Thank you very much.
        With that, Madam Chair, I yield back.
        Ms. DeGette. Thank the gentleman.
        Chair now recognizes the gentlelady from New York, Ms.
    Clarke, for 5 minutes.
        Ms. Clarke. Thank you, Madam Chairwoman, and thank you,
    Ranking Member, for convening this very important hearing. I
    want to thank our witnesses as well for your testimony and
    testifying here today.
        In my district in Brooklyn, New York, I have both the
    Barclays Center and the historic Kings Theatre, which draws
    crowds from across the borough, city, and tri-state area.
    Whether people are taking their families to see a Nets game or
    a concert, it is very important to me that the consumers are
    protected against harmful practices which have filled the
    marketplace for far too long.
        Having said that, I want to circle back to an issue that
    was mentioned earlier, Ms. Howe. Can you please clarify
    something you said for me, and that is: I'm trying to determine
    on what--what you do with consumer data you receive from
    customers who buy tickets on other platforms like Stubhub, and
    what is it that you cannot do with that data?
        Ms. Howe. Thank you for the question.
        The only thing we can--the only information we receive is
    the consumer's name, email, and phone number, and the only
    thing we can do with that is fulfill the ticket, and, if there
    is an issue fulfilling that, we use it for customer services.
    So all consumers have to opt-in for marketing purposes. That's
    regardless of what platform they're buying on.
        Ms. Clarke. So there is nothing that you can do outside of
    just basically obtaining the data; is that what you're saying?
        Ms. Howe. I'm saying that we cannot use any information
    that is acquired from another platform for any marketing
    purposes, correct?
        Ms. Clarke. OK. Very well.
        According to a 2018 article in the New York Times, Live
    Nation operates more than 200 venues worldwide, promotes more
    than 30,000 shows around the world, and manages over 500
    artists. At the same time, Ticketmaster, which merged with Live
    Nation in 2010, handles tickets for 80 of the top 100 arenas in
    the country, and sold more than 500 million tickets in 2018.
        After the merger between Live Nation and Ticketmaster, Live
    Nation is arguably the most powerful company in the
    entertainment industry. In fact, an article in The Economist
    called Live Nation a, quote, vertically integrated behemoth,
    end quote. The New York Times article I quoted from above also
    contained alarming claims about how Live Nation is wielding its
    market power.
        Mr. Perez, according to the article, Live Nation threatened
    to bypass shows at venues managed by your company unless the
    venue used Ticketmaster as the ticketer for the venue. To your
    knowledge, has Live Nation ever threatened to retaliate against
    a venue if it doesn't use Ticketmaster as its platform, Mr.
    Perez?
        Mr. Perez. I have not heard it. The threat has not been
    made to me personally. I do know people that have had comments
    made to them.
        Ms. Clarke. Ms. Howe, are you aware of any instances where
    Live Nation or any of its affiliates threatened to bypass a
    venue unless Ticketmaster was used as the primary ticketing
    platform?
        Ms. Howe. I'm not aware of any. You're referring to as many
    as of you know, we just agreed to extend the consent decree
    with the DOJ, and we believe that that will take this issue off
    the table. We will compete on our own innovation and our own
    right, not because of content.
        Ms. Clarke. OK. In response to The New York Times article,
    Ticketmaster's president stated that its industry, quote, is
    not the--not the result of any unfair advantages resulting from
    being a part of the Live Nation entertainment, end quote.
        Ms. Burns, in your testimony, you stated that, in recent
    years, Stubhub's mission has been, quote, complicated by
    various anticompetitive, anticonsumer practices in the
    ticketing industry, end quote.
        How does Ticketmaster's dominance contribute to the
    anticompetitive and anticonsumer practices in the industry?
        Ms. Burns. I wish we had more time than we do to discuss
    this, but we--we have had reports to us of experiences of
    retaliation if Stubhub was used as the ticketing partner. As--
    but what's important to understand is, you know, Ticketmaster,
    in maintaining its dominance, there are three things really.
    They're, you know, 80 percent of the primary ticketing share.
    They operate or control 80 of the top 100 venues in this
    country, and they--Live Nation, their parent, is the promoter
    for over 400 artists.
        So, when you have that kind of control over the industry,
    it is very difficult, once you--once you start and do business
    with them, to ever exit this ecosystem is how we're referred
    to--an ecosystem that Ticketmaster has created. That's exactly
    it. They've created this ecosystem that is very difficult to
    leave.
        And so, as a result, it is hard. We have had experience in
    trying to enter the primary ticketing segment and have
    experienced difficulty as a result of, you know, this dominance
    in the market.
        Ms. Clarke. Very well.
        I yield back. Thank you very much, Madam Chair.
        Ms. DeGette. Chair now recognizes the gentleman from
    California, Mr. Peters, for 5 minutes.
        Mr. Peters. Maybe just to follow up, is it--so I've heard
    some discussion of whether tickets should betransferable. It's
    obviously a big issue. Is it ever appropriate to hold back any
    tickets from being transferable or to do kind of the off-the-
    manifest kind of things? Is that something that is ever
    appropriate? Mr. Perez?
        Mr. Perez. I'll give you a specific example. In the State
    of Colorado, there is a venue that we ticket, Red Rocks, and
    the first row of that very iconic venue is reserved for ADA
    seating----
        Mr. Peters. Right.
        Mr. Perez [continue]. And because of laws, we're unable to
    verify people's disabilities, and, as part of the consent
    decree with Denver Arts & Venues and some advocacy groups,
    we're actually able to make those tickets nontransferable to
    have a greater influence over those tickets being resold and
    making sure that the people with disabilities are the ones who
    are actually using it.
        Mr. Peters. OK. How about if the venue or the band wants to
    hold back tickets for itself? Is that something that could be
    nontransferable? Is it ever appropriate for that to be
    nontransferable? Ms. Howe?
        Ms. Howe. There are holds, and then there is the issue of
    should that ticket be nontransferable. Artists can hold back
    inventory for important purposes----
        Mr. Peters. I see Mr. Vaccaro seems to be objecting to that
    kind of practice. Is that true, or----
        Mr. Vaccaro. Well, just for clarity's sake----
        Mr. Peters. Is that a transparency issue?
        Mr. Vaccaro. I think that, as far as holdbacks, that bands
    and the artists should be able to hold back whatever tickets
    they want, just as long as they disclose them to the public.
    So, as far as holdbacks, it's that.
        I think the problem with transferability is it gets to a
    slippery slope on what could be transferred or not, and, you
    know, a classic example is Ed Sheeran said his tickets aren't
    transferable, nobody can make it to the show, the tickets were
    selling for less than face value. Even though he had a face
    value exchange, he wouldn't let consumers transfer them, and,
    especially when you get to transferability----
        Mr. Peters. I understand that, but I'm sort of thinking
    there is a difference between 100 percent nontransferable and
    five percent nontransferable.
        Mr. Vaccaro. I agree with you.
        Mr. Peters. OK.
        Mr. Vaccaro. I think you're correct; it's a huge
    distinction.
        Mr. Peters. Is that a line that you think Congress could
    draw in an effective way?
        Mr. Vaccaro. I think it would be very difficult without--
    very difficult to do unless it was very tightly written so that
    people couldn't use that to advance their, let's say, monopoly
    on tickets. That's the problem.
        Mr. Peters. OK. Maybe a question for Ms. Howe. You know, we
    were just--Ms. Burns was pointing out how many venues you own
    in our district. House of Blues, the Padres, Humphreys, The
    Civic Center. Some of these venues have experienced this kind
    of fraud, and they seem to have little recourse against brokers
    and platforms that engage in this deceptive behavior.
        What are the remedies, and what suggestions do you have for
    us to address this kind of problem?
        Ms. Howe. Thank you for the question.
        A couple of things. One is, as I mentioned in my opening
    remarks, we're fighting bots every month and every day. We're
    blocking--we'll block three billion every month, 30 billion
    this year. But, more importantly, we need to figure out how to
    change the conditions at on-sale. So we're investing in
    products like Verified Fan and Smart Queue that allow real fans
    to actually get those tickets instead of brokers and secondary
    markets.
        We're also investing in digital technology that shuts that
    fraudulent ticket market down, so, instead of the anonymous
    barcode that can be--you can take a screenshot and send it to
    somebody else, and it's a fraudulent ticket, that digital
    ticket is now tied to your identity.
        Mr. Peters. Ms. Burns, you had made--you're making an
    anticompetitive argument. Does this kind of vertical
    integration for security make the challenge a little more
    difficult for you?
        Ms. Burns. Absolutely. They control the supply chain end to
    end, starting with artists, you know, the venue.
        Mr. Peters. So, given the concern about security, how would
    you suggest we draw the line at--between primary and secondary?
        Ms. Burns. I'm not sure I'm tracking the question.
        Mr. Peters. So Ms. Howe has made an argument that, because
    she's issuing the tickets----
        Ms. Burns. Yes.
        Mr. Peters [continue]. She has a way to make sure that
    they're followed kind of through the course of the transfer.
        Ms. Burns. Yes.
        Mr. Peters. That, again, seems to root transferability into
    the same concern you had before.
        Ms. Burns. And I think it's--I think it's possible to use
    technology. You know, we should explore the use of technology
    in order to track the ticket----
        Mr. Peters. Right.
        Ms. Burns [continue]. You know, prevent fraud.
        Where we take issue is how Ticketmaster is doing it and
    through the use of SafeTix technology is not for that purpose.
    We don't think it's, you know, for the legitimate purpose of
    cracking down on fraud because, again, remember, they don't do
    any sort of background check onthe----
        Mr. Peters [continue]. Member.
        Ms. Burns [continue]. Individual. They don't know who else
    is going, like--so, in terms of, you know, tracking those
    issues, it's just not used for that purpose.
        Mr. Peters. You think they're two different issues?
        OK. My time is expired, but I appreciated all the witnesses
    being here, and I look forward to working on this.
        I yield back.
        Ms. DeGette. I thank the gentleman, and I'm very pleased to
    recognize the gentleman from Texas, Mr. Flores, who is not a
    member of this subcommittee, but we're always happy to have you
    here, and now you're recognized for 5 minutes for questions.
        Mr. Flores. Thank you, Madam Chair.
        I have some questions for Ms. Burns with Stubhub.
        Let me give you the background first. There are situations
    where a customer buys a ticket from an event sponsor, and then,
    later on, they decide they can't use that ticket, and then they
    use your platform to resell the ticket because of an
    arrangement that you had with the original ticket--the original
    event sponsor, and there is a fee charged for that resale in
    the form of a reduction amount of proceeds that are received by
    the ticket seller.
        So how much is that fee?
        Ms. Burns. The fee that's charged to seller--so there is no
    fee charged to the seller to actually list on our site. There
    is a fee that's charged on the sell, and it depends on who the
    seller is.
        Mr. Flores. OK. And then the--how is that fee set?
        Ms. Burns. Well, again, the fee is set based on who the
    seller is. So we have agreements with our sellers, and so----
        Mr. Flores. But the seller is the customer. Are you talking
    about the event sponsor is the seller in this case? So let's
    say I buy a ticket----
        Ms. Burns. Right.
        Mr. Flores [continue]. And I pay the full price for it from
    the event sponsor.
        Ms. Burns. Yes.
        Mr. Flores. And Stubhub has never been part of the
    transaction, and then, if I want to resell it, the only way I
    can resell it is because of some arrangement that the event
    sponsor has with Stubhub. I sell the ticket, and then there is
    this big discount taken, this big fee that's taken off, and I
    get the net proceeds. So who sets that fee?
        Ms. Burns. Who sets the fee is Stubhub sets the fee with
    that seller.
        Mr. Flores. OK. And then does the original event sponsor
    receive part of that fee?
        Ms. Burns. I don't know.
        Mr. Flores. OK. Would you supplementally respond to that
    for us and let us know?
        Ms. Burns. Absolutely.
        Mr. Flores. And, if yes, why does the original event
    sponsor receive part of the fee for something they've already
    received full value for is the question?
        And then the next question is, is there any disclosure to
    the customer that part of that fee is going back to the
    original event sponsor that the customer bought the ticket
    from?
        Ms. Burns. OK. We'll follow up with you.
        Mr. Flores. You'll get back with us on that?
        Ms. Burns. Yes, I'm happy to do that.
        Mr. Flores. And if there is any disclosure--if not, why
    not, doesn't the customer deserve to see what that is?
        And then the last question would be: What value to the
    customer is there for paying an additional fee back to the
    event sponsor?
        Ms. Burns. I just want to make something clear. As is it
    relates to fees, we are fully transparent as to fees that are
    charged to the customer on our site, right? The customer knows,
    throughout the search and the sale and the--and the sale, the
    checkout process, what fees they are being charged. At no
    point, when they purchase a ticket, do they not know what fees
    they will be charged at the time of payment.
        Mr. Flores. Right. And I'm not saying there is no
    transparency in terms of the amount of the fee.
        Ms. Burns. Yes.
        Mr. Flores. It is just--a 15 percent fee for a $100 ticket
    seems pretty expensive when--particularly if the original event
    sponsor is getting part of that fee. There is getting some sort
    of a kickback for part of that fee. So we need to figure that
    out because I've noticed, in some situations, the fee was 10
    percent one year, and then, the very next year, it's 15
    percent. So we need to figure out why did that just suddenly--
    why did the amount of the fee go up 50 percent in one year?
        And then one just sort of an editorial comment for all of
    you in this space, and that is that there is--as you've heard
    from, I think, most everybody that's testified or asked
    questions, there has been a--there is a lot of customer angst
    about what happens in this space, and I think it would behoove
    all of you that, when you're designing your processes, your
    policies and pricing and procedures, that put yourself in the
    customers' shoes, look at it through the customers' eyes, and I
    think, if you do that, you wouldn't be in front of this panel
    today.
        So thank you. I yield back the balance of my time.
        Ms. DeGette. Thank the gentleman.
        Chair just has--I just have one more question to clarify.
        Ms. Howe, you had said several times that Ticketmaster,
    when it takes the data, it takes the name, the email address,
    and the phone number of the purchaser. Is that right?
        Ms. Howe. Correct.
        Ms. DeGette. And that it doesn't resell, or it doesn't
    market to those people?
        Ms. Howe. We are not--only if a consumer opts in do we have
    the right to market to them?
        Ms. DeGette. OK. What about if a person puts their--is
    trying to purchase the ticket on one of the reselling platforms
    like Stubhub? Is the--is Ticketmaster's policy the same way if
    they--only if they opt-in?
        Ms. Howe. Correct. They can only--they opt-in, and it's
    even more restrictive if it's bought on another platform.
        Ms. DeGette. What's the----
        Ms. Howe. In other words, we can only use that information
    to fulfill the ticket and provide any service needed to do
    that.
        Ms. DeGette. OK. Thank you.
        And I want to thank the entire panel. This was actually a
    very, very informative hearing for everybody on the committee
    on both sides of the aisle, and now it's going to go over to
    the Consumer Protection Subcommittee for action on the BOSS
    Act, but this was really useful for us.
        And I'd like to insert into the record by unanimous consent
    the report by the New York attorney general on the ticketing
    industry entitled ``Obstructed View: What's Blocking New
    Yorkers From Getting Tickets''and the report by the Government
    Accountability Office entitled ``Event Ticket Sales Market
    Characteristics and Consumer Protection Issues'' and, in
    addition, I'd ask unanimous consent that the contents of the
    document binder be introduced into the record and to authorize
    staff to make the appropriate redactions.
        Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Ms. DeGette. And let's see. I guess--oh, I'd like to remind
    Members--I'd ask--I'd like to ask the witnesses, if you have--
    if you've been requested to provide additional information,
    that you do so.
        And, with that, this subcommittee is adjourned. Thank you.
        [Whereupon, at 12:01 p.m., the subcommittee was adjourned.]
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