[Senate Report 114-391]
[From the U.S. Government Publishing Office]
114th Congress } { Report
SENATE
2d Session } { 114-391
_______________________________________________________________________
BETTER ONLINE TICKET SALES ACT OF 2016
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 3183
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 5, 2016.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
69-010 WASHINGTON : 2016
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
second session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
114th Congress } { Report
SENATE
2d Session } { 114-391
======================================================================
BETTER ONLINE TICKET SALES ACT OF 2016
_______
December 5, 2016.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 3183]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 3183) to prohibit the
circumvention of control measures used by Internet ticket
sellers to ensure equitable consumer access to tickets for any
given event, and for other purposes, having considered the
same, reports favorably thereon with an amendment (in the
nature of a substitute) and recommends that the bill (as
amended) do pass.
Purpose of the Bill
The purpose of S. 3183, the Better Online Ticket Sales Act
of 2016 (BOTS Act of 2016), is to prohibit the circumvention of
control measures used by Internet ticket sellers to ensure
equitable consumer access to tickets for any given event.
Background and Needs
The market for live event tickets has encountered
challenges from scalpers who use software to circumvent the
safeguards primary ticket sellers use to limit ticket
purchases. This software, commonly referred to as ``bots'' or
``bot'' software, automates ticket-buying on online platforms
by: (1) automatically and continuously checking ticket seller
websites for ticket releases; (2) automatically reserving and
displaying available tickets for the human operator; (3)
automatically buying tickets using as many names, addresses,
and credit card numbers as necessary to appear to be individual
ticket buyers; and (4) defeating anti-ticket bot security
measures such as so-called CAPTCHA (Completely Automated Public
Turing test to tell Computers and Humans Apart) to determine
whether or not a ticket purchaser is human (for example, by
asking the purchaser to type correctly a series of letters that
appear as a twisted or stretched image on the ticketing
website).\1\
---------------------------------------------------------------------------
\1\Eric T. Schneiderman, N.Y. State Office of the Attorney General
(OAG), Obstructed View: What's Blocking New Yorkers from Getting
Tickets, pp. 15-16, January 2016, at http://www.ag.ny.gov/pdfs/
Ticket_Sales_Report.pdf [hereinafter N.Y. OAG Report].
---------------------------------------------------------------------------
In many cases, primary ticket sellers limit purchases. For
example, ticket sellers often make tickets available to the
general public on a set date and time\2\ and may limit the
number of tickets to four or six per purchasing party.\3\ These
measures are aimed at ensuring that ticket buyers have a fair
chance of obtaining tickets to the live event, which are
necessarily limited in number. Ticket sellers also generally
prohibit the use of automated software to defeat the technical
safeguards and subvert ticket purchase limits. For example,
Ticketmaster prohibits the ``[u]se of any automated software or
computer system to search for, reserve, buy or otherwise obtain
tickets . . . available on the Site.''\4\
---------------------------------------------------------------------------
\2\Letter from William M. Rubenstein, Commissioner of Consumer
Protection, State of Connecticut, to Hon. Paul Doyle, State Sen., Co-
Chair, General Law Comm., State of Connecticut, p. 4, February 22,
2012, at http://www.ct.gov/dcp/lib/dcp/pdf/publications/
final_ticket_letter.pdf (``The date on which tickets will be available
to all members of the public is known as the `public on-sale date.''')
[hereinafter Conn. Report].
\3\Testimony of Gil Genn, Managing partner of the Maryland Sports &
Entertainment and Industry Coalition, in U.S. Congress, U.S. Committee
on Energy & Commerce, Subcommittee on Commerce, Manufacturing, and
Trade, Legislative Hearing on 17 FTC Bills, hearings, 114th Congress,
May 24, 2016, (``[F]or most live entertainment events there is a
restriction on the number of seats one purchaser can buy - usually
between 4 and 8 tickets.'') [hereinafter Genn Testimony].
\4\Ticketmaster, Terms of Use, last visited Oct. 19, 2016, at
http://www.ticketmaster.com/h/terms.html.
---------------------------------------------------------------------------
The use of ticket bots has frustrated the intentions of
performers\5\ and other ticket sellers\6\ to make tickets
available equitably and at reasonable prices. Primary ticket
sellers have estimated that ticket bots obtain 60 percent of
the most desirable tickets for some shows.\7\ Ticket bots also
have enabled scalpers to purchase and subsequently sell large
swaths of event tickets on the secondary market at exorbitant
prices. One study finds that, on average, scalpers mark up the
price of tickets on the secondary market by 49 percent of the
primary ticket seller's price.\8\ The ability to buy massive
amounts of tickets in violation of primary ticket sellers'
terms and technical controls, however, has enabled scalpers in
some instances to mark up the price by over 1,000 percent.\9\
---------------------------------------------------------------------------
\5\Lin-Manuel Miranda, ``Stop the Bots From Killing Broadway,'' New
York Times, June 7, 2016, at http://www.nytimes.com/2016/06/07/opinion/
stop-the-bots-from-killing-broadway.html; Patrick Doyle, ``Eric Church
on Scalpers, Bro-Country and Blake Shelton Scandal,'' Rolling Stone,
June 11, 2014, at http://www.rollingstone.com/music/news/eric-church-
on-scalpers-bro-country-andblake-shelton-scandal-20140611.
\6\Genn Testimony, at p.2.
\7\Ben Sisario, ``Concert Industry Struggles With `Bots' That
Siphon Off Tickets'', New York Times, May 26, 2013, at http://
www.nytimes.com/2013/05/27/business/media/bots-that-siphon-off-tickets-
frustrate-concert-promoters.html.
\8\N.Y. OAG report, p. 4.
\9\Ibid.
---------------------------------------------------------------------------
Several States have enacted laws to combat ticket bots.\10\
Two of these States, New York and Connecticut, also have issued
reports on the market for event tickets in those respective
States.\11\ Although these reports focus more broadly on the
ticket market as a whole, they include some data on ticket
bots.\12\ For example, the New York Attorney General found that
at least tens of thousands of tickets per year are being
acquired using bots. At present, there have been no reports of
enforcement of any of the State laws.
---------------------------------------------------------------------------
\10\Shawntaye Hopkins, Blame it on the Bots: States Act to Ban
Ticket-Buying Software, The Current State (Council of State Gov'ts) ,
July-August 2016, at http://www.csg.org/pubs/capitolideas/enews/
cs53_1.aspx (``about a dozen states have laws that ban ticket bots'').
\11\See N.Y. OAG Report; Connecticut Report.
\12\N.Y. OAG Report, p 4.
---------------------------------------------------------------------------
Legislative History
On July 13, 2016, Senator Moran (for himself, Senator
Blumenthal, Senator Fischer, and Senator Schumer) introduced S.
3183, which was referred to the Committee on Commerce, Science,
and Transportation. Additional cosponsors include Senators
Nelson, Klobuchar, Cantwell, Warner, and Stabenow.
On September 13, 2016, the Consumer Protection, Product
Safety, Insurance and Data Security Subcommittee held a hearing
on S. 3183.
On September 21, 2016, the Committee held an Executive
Session at which S. 3183 was considered. The bill was approved
unanimously by voice vote and was ordered to be reported with
an amendment (in the nature of a substitute).
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 3183--Better Online Ticket Sales Act of 2016
S. 3183 would prohibit people from taking certain actions
to circumvent technology used by ticket sellers to enforce
online event ticket purchase rules and limits. The bill also
would prohibit the resale of tickets obtained in that manner.
The Federal Trade Commission (FTC) would enforce the proposed
prohibition.
Based on information from the FTC about its current
enforcement capabilities, CBO estimates that increased costs
related to monitoring and enforcing the new prohibitions
established by S. 3183 would total less than $500,000 per year;
such spending would be subject to the availability of
appropriated funds.
In addition, CBO estimates that enacting S. 3183 would
increase federal revenues from civil penalties imposed to
enforce the new prohibition; therefore, pay-as-you-go
procedures apply. However, CBO estimates that those collections
would be insignificant because of the small number of cases
that the agency would probably pursue. Enacting the bill would
not affect direct spending.
CBO estimates that enacting S. 3183 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
S. 3183 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
On September 9, 2016, CB0 transmitted a cost estimate for
H.R. 5104, the Better Online Ticket Sales Act of 2016, as
ordered reported by the House Committee on Energy and Commerce
on July 13, 2016. The two pieces of legislation are similar and
CBO's estimates of the budgetary effects are the same.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Regulatory Impact
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
The bill would establish a new prohibition on conduct
relating to circumvention of ticket access control measures,
with certain exceptions including investigation and research.
This prohibition would be treated as a trade rule defining an
unfair or a deceptive act or practice under the Federal Trade
Commission Act (15 U.S.C. 41 et seq.; FTC Act). Therefore, this
legislation would subject those individuals or businesses
engaged in such conduct to new regulations.
economic impact
S. 3183 is expected to have an overall positive impact on
the Nation's economy. While this legislation aims to prohibit
the use of bots, and therefore is intended to have a negative
impact on the business model of ticket resellers who employ
this method to purchase improperly available tickets in large
numbers, S. 3183 nevertheless would have a positive impact on
the secondary ticket sellers to the extent that it would
advance a fair and competitive ticket market. S. 3183 would
ensure a large percentage of available tickets remain available
to fans at fair and reasonable prices, which in turn would
encourage additional spending on merchandise, concessions, and
additional events.
privacy
S. 3183 would not have a negative impact on the personal
privacy of individuals.
paperwork
S. 3183 would increase the paperwork burden of States,
requiring the attorney general of a State to notify the Federal
Trade Commission (FTC) in writing that the attorney general
intends to bring a civil action under this legislation before
initiating the civil action (if feasible, or otherwise
immediately upon instituting the civil action), including a
copy of the complaint filed to initiate the civil action.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title.
This section would provide that the Act may be cited as the
``Better Online Ticket Sales Act of 2016'' or the ``BOTS Act of
2016.''
Section 2. Unfair and deceptive acts and practices relating to
circumvention of ticket access control measures.
This section would prohibit any individual from
circumventing a security measure, access control system, or
other technological control or measure on an Internet website
of a ticket issuer that is used by the ticket issuer to enforce
posted event ticket purchasing limits or to maintain the
integrity of posted online ticket purchasing order rules. It
also would prohibit the sale or offer for sale of any event
ticket in interstate commerce obtained in violation of these
measures if the person selling or offering to sell the tickets
either participated directly in or had the ability to control
the conduct in violation of these measures, or knew or should
have known that the event tickets were acquired in violation of
these measures.
This section would exempt the creation or use of any
computer software or system to: investigate, or further the
enforcement or defense of, any alleged violation of this
section or other statute or regulation; or engage in research
necessary to identify and analyze flaws and vulnerabilities of
measures, systems, or controls if these research activities are
conducted to advance the state of knowledge in the field of
computer system security or to assist in the development of
computer security product.
This section would require the FTC to enforce this section
as an unfair or deceptive act or practice under the FTC Act,
while holding any individual in violation of this section
subject to the penalties and entitling them to the privileges
and immunities of that law.
This section would allow the attorney general of a State to
bring civil action on behalf of the State's residents, as
parens patriae, if the attorney general believes that an
interest of the State's residents has been or is threatened by
any person in violation of this section. It would provide a
State's attorney general the authority to obtain damages,
restitution, or other compensation on behalf of the State's
residents.
This section also would require a State's attorney general
to notify the FTC of any civil action pertaining to this
section within 10 days of the action's initiation with some
feasibility exceptions provided. It would allow the FTC to
intervene in any civil action brought by a State's attorney
general under this section.
This section would reaffirm that nothing in the section may
be construed to prevent a State's attorney general from
exercising his or her investigatory powers by the laws of the
State. This section would prevent a State's attorney general,
in an effort to preempt action by the FTC, from bringing a
civil action under this section if the FTC has already
instituted a civil action or an administrative action against
the same defendant.
It would authorize that any action under this section may
be brought in the applicable district court of the United
States or another court of competent jurisdiction. This section
also would authorize any other consumer protection officer
authorized by a State to bring a civil action within this
section subject to the same requirements and limitations that
apply to a State's attorney general.
This section contains a savings provision that would
provide that nothing in the section be construed to limit,
impair, or supersede the operation of the FTC Act or any other
provision of Federal law.
Section 3. Definitions.
Section 3 of the bill would define terms used in the bill,
including ``covered events,'' ``tickets,'' and ``ticket
issuers.''
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill as reported would make no change to existing law.
[all]