No running away from ticket resale inspectors
The Federal Government has introduced new consumer protection requirements for the resale of event tickets on electronic platforms, which take effect from 1 October 2022.
After an extensive consultation process dating back to August 2017, the Federal Government recently introduced a series of new obligations for the resale of event tickets on electronic platforms. The Competition and Consumer (Australian Consumer Law—Electronic Ticket Resale Service) Information Standard 2022 (Cth) (the Standard) was made by Assistant Treasurer Michael Sukkar on 30 March 2022 and will take effect from 1 October 2022. The Standard sets out prescribed wording and pricing information that must be displayed by event ticket resellers on electronic platforms they operate.
The consultation commenced after the ACCC took court action against ticket reseller viagogo, which was ordered to pay $7 million in penalties in 2020 (currently under appeal).
Purpose of the Standard
In the Explanatory Statement to the Standard, the Federal Government flagged the concerns it had with ticket resale websites including that:
- users of electronic ticket resale services may mistakenly think that they are purchasing tickets from the original ticket seller;
- a possible consequence of this mistaken impression is that consumers may purchase tickets from a reseller at a higher price than they would have otherwise paid, if they purchased the tickets from the original ticket seller; and
- consumers who purchase tickets from ticket resellers may not have timely or easy access to information about ticket prices offered by the original ticket sellers.
The Standard is intended to address these concerns by ensuring that consumers would be informed about:
- who they are purchasing tickets from; and
- the price differential between the ticket offered by the original ticket seller as against the ticket reseller.
In his media release posted on 1 April 2022 after making the Standard, Mr Sukkar also drew attention to border restrictions being eased and a corresponding increase in events where tickets may be available on resale websites.
Requirements of the Resale Standard
The Standard applies to services meeting both of the following conditions:
- the service is the provision of information to a consumer in relation to the supply, in a secondary market, of a ticket for admission to an event hosted or located in Australia; and
- the information is supplied by means of an electronic platform whose sole or dominant purpose is to facilitate a market in tickets for admission to events.
“Electronic platform” is undefined but Mr Sukkar’s media release flags the intention of the Standard is to capture ticket resale websites. The Explanatory Statement also describes mobile phone applications as an electronic platform, suggesting the Standard may also capture such applications.
Events covered by the Standard include:
- sporting events;
- entertainment events, such as concerts, the theatre, the opera and dance events;
- cultural events or displays;
- arena events; and
- any other forms of public performances, exhibitions, displays or gatherings.
The Standard requires persons who provide these event ticket resale services to continuously display the following on the electronic platform in a “legible, prominent and unambiguous way”:
- a statement in the form “This is a ticket resale service. You are not buying from a primary ticket provider”; and
- the total price, excluding the delivery charge, that the consumer would reasonably be expected to pay to purchase the ticket from the original ticket seller.
Significant consequences for non-compliance
Businesses and persons that operate ticket resale websites and mobile phone applications should carefully review the Standard and ensure their platforms set out the required wording and information by 1 October 2022. Failure to do so may result in enforcement action by the ACCC. The ACCC has, in recent years, demonstrated an appetite to take enforcement action against businesses that breach the ACL in respect of online commerce.
The court may impose the following orders under the Australian Consumer Law (ACL) for breaches of an information standard:
- pecuniary penalties per contravention up to the greater of $10 million, three times the benefit gained from the conduct or 10% of annual turnover pursuant to ss 137 and 224;
- a criminal conviction and fine under s 204; and/or
- an order disqualifying a person from managing corporations for a period the court considers appropriate under s 248.
Event ticket resellers also open themselves up to loss or damages claims by private litigants, which are expressly contemplated by s 137(3) in respect of failures to comply with information standards for services.