FTC Fires Back Against Key Investment Group As Ticket Reseller Moves to Dismiss Case

The FTC claps back against Key Investment Group’s motion to dismiss their suit against the ticket reseller, asserting violations of the BOTS Act.

Key Investment Group (KIG), which was sued by the Federal Trade Commission (FTC) in August with allegations of violations of the BOTS Act, filed a motion to dismiss the FTC’s case against the ticket reseller, asserting the company “does not use bots.” Now, the FTC is firing back with a filing highlighting why the case should not be dismissed.

The FTC’s latest filing doubles down on allegations that Key Investment Group and related high-volume ticket broker defendants use technical workarounds to circumvent Ticketmaster’s policies and controls, and purchase more tickets than permitted in order to resell them at marked-up prices. The BOTS Act makes it unlawful to circumvent any security measures in place that enforce posted ticket limits or online purchase order rules.

KIG’s prior filing highlighted a so-called contradiction between the FTC’s case against it and the agency’s separate (but not entirely unrelated) lawsuit against Ticketmaster and Live Nation. In that case, the FTC alleged that the ticketing company “knowingly allows” and even encourages “brokers to use multiple Ticketmaster accounts.” KIG’s attorneys claim that the FTC cannot have it both ways; if Ticketmaster encourages multi-account purchasing, then KIG is not circumventing any rules.

But the FTC claims it only needs to plead circumvention of a security or technological measure on a website, and that the measure is used to enforce posted ticket limits or purchasing rules. It argues that its complaint clearly alleges both: Ticketmaster’s measures (IP, account, and verification controls), and the defendants’ use of “proxies, sham accounts, credit cards, and SIM boxes” specifically to circumvent those controls.

Chiefly, the FTC argues that to “circumvent” doesn’t require deception by bots, secrecy, or lack of Ticketmaster’s knowledge. It also claims that its liability is not limited to the use of “bots.” According to the FTC, the word “bot” never actually appears in the text; the acronym “BOTS” and legislative comments do not override “clear language” that covers any circumvention of security measures. Moreover, even if “bot” use were required, the FTC posits that devices like SIM boxes and the automation of verification steps would qualify as “bot-like tools.”

As the FTC feels it has adequately alleged statutory violations, and because KIG’s arguments “lack support in the statute,” the commission asks the court to deny the defendants’ motion to dismiss.

Now, it will be up to U.S. District Judge George L. Russell III to consider both parties’ motions and whether to dismiss the government’s case before discovery begins.