[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      
      
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                        energycommerce.house.gov
                        
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                    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:]
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    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:]
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    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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