FTC ticket bots

Photo Credit: Eric Krull

As the FTC cracks down on ticket resellers for alleged violations of the BOTS Act, one targeted reseller files suit. NITO responds.

The Federal Trade Commission (FTC) is threatening legal action against Key Investment Group (KIG) and other ticket resellers for alleged violations of the BOTS Act. News of the crackdown first emerged in the form of a preemptive lawsuit filed by KIG, a leading secondary market ticketing company. Now, the National Independent Talent Organization (NITO) has issued a statement on the matter.

KIG’s lawsuit, filed last week in the District Court for the District of Maryland, asserts that the FTC’s claims are inaccurate. KIG and other secondary market companies have been purchasing tickets using multiple accounts, which the company says is not a violation of the BOTS Act. When KIG learned of the FTC’s plans to file a civil action against it, KIG filed suit to head the organization off at the pass.

“KIG is standing up for the consumers and a fair and free secondary market. Any fan who has ever bought and sold concert tickets understands there’s tremendous risk involved. For every one artist with sold out high-demand tickets, there are hundreds of artists that have trouble selling out their shows,” said a representative for Key Investment Group.

“Published secondary data shows that nearly 40% of all concert tickets sold for under $50 and that 55% of all secondary listings had tickets listed for resale at below face value. This lawsuit against the FTC makes clear that a well-regulated secondary ticket market empowers fans, increases access, allows open competition and free markets, and strengthens the live event economy.”

“The FTC’s actions will serve to benefit the one or two ticketing giants in the space and strengthen their already tight grip on ticketing at the expense of consumers,” the KIG representative explained. “We would love nothing more than having the use or practice of bots for purchasing tickets to be eliminated from our industry. That is what the BOTS Act is about. It is not about shutting down legitimate businesses to satisfy a few multinational corporations.”

Now, in response to the news that the FTC is threatening legal action against resellers like KIG, industry organizations and figures are voicing their support.

“KIG’s model involves using hundreds of Ticketmaster accounts, pseudonyms, and remote browsing tools to scoop up tickets and flip them on resale platforms,” writes artist manager Randy Nichols on LinkedIn. “They claim it’s legal because they didn’t use ‘bots.’ But let’s be honest: it’s functionally no different.”

“KIG’s de facto director, Taylor Kurth, was previously fined $60,000 by the Washington State AG in 2018 for violating the BOTS Act. Now they’re back, arguing that government enforcement is unfair,” Nichols explains. “Here’s what their lawsuit really says: ‘Everyone else is doing it, and Ticketmaster lets us, so we should be allowed to keep doing it.’ That’s not a defense. That’s an admission.”

“I’m thankful to see the FTC stepping up here,” he adds. “And this case matters. […] Let’s keep the pressure on!”

Meanwhile, Nathaniel Marro, Executive Director of the National Independent Talent Organization (NITO), released a statement to DMN. NITO is the U.S. trade organization for hundreds of independent music agents and managers and the thousands of artists they represent.

“If KIG doesn’t think multi-account behavior violates the BOTS Act, they should go back and read the law. NITO is encouraged to see the FTC continue to crack down on BOTS Act violators and will happily assist their efforts anyway we can,” said Marro.

The U.S. Department of Justice continues to investigate unfair practices by major players in the primary ticketing and live event promotion industry. It’s encouraging for fans and the broader music industry to know that, similarly, the FTC is taking action on market manipulation in the form of scalping. Now, we eagerly await an official statement from the FTC.