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Breaching of Limits on Ticket Sales Regulations 2018

Volume 791: debated on Wednesday 13 June 2018

Motion to Approve

Moved by

My Lords, these regulations will be an important addition in our efforts to stamp out unacceptable behaviour in the ticketing market. I know that the activities of the secondary ticketing market are of interest to many noble Lords, including those here today. The Government recognise that the process of distributing and buying tickets can often be a cause for public frustration and concern. Many of us have experienced the frustration of waiting for tickets to go on sale for our favourite events, our fingers hovering over the keyboard in the final countdown, only to find that all the tickets seem to have been mysteriously snapped up in seconds.

What is even more frustrating is seeing tickets reappear on secondary sites almost instantaneously, often at a huge mark-up in price. There is evidence that this is largely caused by the use of software or bots to automate the ticket purchasing process on the primary market to circumvent limits on the maximum number of tickets that can be purchased. This issue was specifically addressed by Professor Waterson in his independent review of consumer rights provisions relating to online ticket sales, which reported in May 2016. His view, which the Government share, was that ticket sellers should adopt strategies to prevent automated ticket purchasing by bots, although he also noted that there was some uncertainty over the existing legal position on their use. This instrument clarifies the law in this area by making it a criminal offence to purchase more tickets than the maximum permitted for a recreational, sporting or cultural event in the United Kingdom where the purchase is made electronically through the use of software designed for this purpose and where the intent is to obtain financial gain.

While the regulations apply to events in the United Kingdom, they cover activity to obtain tickets in any jurisdiction. The intended offence will be summary only, with a maximum punishment of an unlimited fine in England and Wales, and an exceptional summary maximum in Scotland, as magistrates’ courts in Scotland do not have the power to impose unlimited fines. The relevant section of the Digital Economy Act 2017 was not commenced in Northern Ireland because of the ongoing suspension of the Northern Ireland Executive, but it is the intention for it to be commenced and for this instrument to apply to events in Northern Ireland once legislative consent is able to be secured.

These regulations will, we hope, significantly improve the current situation, in which so many tickets for an event can disappear within seconds of their going on sale. They should be seen alongside other measures to address unacceptable behaviour in the ticketing market, such as the ticket information requirements set out in the recently strengthened Consumer Rights Act 2015; the enforcement work of National Trading Standards, the Competition and Markets Authority and the advertising industry’s own regulator, the Advertising Standards Authority; and the adoption by event organisers and ticketing agencies of innovative technological solutions such as blockchain and ticketless tickets. I hope noble Lords will agree that these regulations are a necessary additional tool in helping fans improve their chances of securing tickets at reasonable prices.

My Lords, I want to make a few comments, which I hope the Minister will respond to at the conclusion of our short debate. I very much welcome this important step in continuing the fight against abuse in the ticketing market, in particular the secondary ticketing market. Only earlier today I received representations from a man whose wife and eight year-old daughter received tickets from viagogo, only to discover, having paid a significant amount of money, that once again viagogo has flouted the law and the tickets are illegal. They are due to go to the event tomorrow evening, and the eight year-old girl is desperately looking forward to it. It is appalling that this sort of crime continues to occur. The advice he has been given is that his wife should go to the window next door and buy another set of tickets which might—but only “might”—be available that evening and claim the money back in time. There was no response to the many calls he made to viagogo. That is just one example and those of us who are interested in this subject know that there are many others, on a day-by-day basis, in particular involving viagogo and others in the secondary market.

I am very grateful to the Minister and I know he is very supportive of the work that has been done on this. The principal concern for us this evening is to focus on enforcement. It has been brought to the attention of the All-Party Group on Ticket Abuse, of which I am co-chair, that the current legislation could be interpreted in such a way that only the police have an enforcement power under this instrument. While it is desirable for the police to have that power, the majority of enforcement in respect of ticket legislation is undertaken by trading standards, specifically the National Trading Standards cybercrime unit.

On the last occasion we debated this subject, my noble friend the Minister made it clear that the House wanted tougher action to deal with the serious problems in the secondary ticketing market and that the Government were accurately and rightly taking further action. That is why at that time the Government determined to provide additional funding for National Trading Standards to take further enforcement action. In the context of what we are discussing today, I would be grateful for clarification from the Minister that enforcement will still be an important part of the work of National Trading Standards, which is well furnished with information about the volume of intelligence on bots, the levels of activity, the offences committed and how bots fit into the overall hierarchy of touting.

Another point of concern is that there is evidence that a number of companies in the secondary market tend to flout the law in the United Kingdom by basing themselves abroad to avoid the enforcement powers we have at our disposal. This could also apply to the use of bots abroad to sweep the market. I would be grateful if the Minister could explain the enforcement action that may be taken against bots being used to deliver tickets en masse to the secondary market abroad; whether co-operation between the relevant authorities is high on his list; and whether he can report to the House on that subject.

Once again, I am grateful to my noble friend. I am keen to hear more about the important role of National Trading Standards, whether it has a significant ongoing role and whether any action can be taken against the abuse—which should more accurately be called “a bot”—abroad.

My Lords, I am pleased to follow the noble Lord, Lord Moynihan, who has such a distinguished record in combating this terrible problem of ticket fraud and the exploitation of consumers. I also have one two questions for the Minister, which follow on from what the noble Lord has said.

The noble Lord, Lord Moynihan, referred to the company viagogo. Has anything come of the warning by the Consumer Minister, Margot James, who advised anyone planning to buy tickets on resale websites, “Don’t choose Viagogo—they are the worst”? The Advertising Standards Authority has referred viagogo to National Trading Standards, citing a series of transgressions breaching the UK’s advertising code. Where has that inquiry got to and can the activities of viagogo in the United Kingdom be curbed, if not closed down altogether?

What steps have been taken to ensure that the Criminal Justice and Public Order Act 1994 provisions, which make it an offence to resell football tickets in Britain at more than list price, are being observed? What prosecutions have followed of people who have breached those provisions—not only viagogo but other companies using bots and touts in the way described by the noble Lord, Lord Moynihan? Noble Lords with long memories will recall that that legislation was brought in not as a consumer protection measure but as a public safety and anti-hooliganism measure to solve the problem of fans of rival groups mixing together in a hostile manner in football grounds. One of the ways in which that could have been curbed was by ensuring that tickets were not being sold to anyone through undesirable sites such as viagogo and others.

Those are my only questions. I welcome the regulations and I hope they achieve the result the Minister has set out for them.

My Lords, it is very important that the draft regulations laid before the House on 26 April should now be approved, and therefore I enthusiastically support this Motion. Bots in particular must be abolished. They were a method by which digital touts, which is what I call them, could acquire tickets for sporting and cultural events for the secondary ticketing market and resell them at greatly inflated prices. My concern, though, is that these unprincipled secondary market touts are clever and cunning. They will continue to find ways of trying to circumvent these regulations. It is therefore important that the National Trading Standards authority or another body like that is given more powers to monitor the regulations and, when necessary, prosecute offenders.

However, bots and the secondary ticketing market are not the only reasons why West End theatre prices for popular shows have risen so steeply over the past 10 years. Of the 40 or so main West End theatres, more than three-quarters of them are owned by just four companies. It is the theatres, not the producers of the shows, that fix the ticket prices, arrange special deals, determine the publicity and control the ticket agents, of which in each case they will be one themselves. It seems that this small number of theatre companies, acting as a sort of unofficial cartel, are in a position to dominate the London theatre market. Does the Minister agree that there should be an investigation by the Competition and Markets Authority, or again some similar organisation, into this very unsatisfactory situation?

My Lords, I join those who have welcomed this statutory instrument. We could say that progress on the part of the Government has been somewhat slower than perhaps we would have wished, but nevertheless we are surely getting there. That is largely due to the fact that we are working in a cross-party way and in a spirit of collegiate support on the issues that are worrying us in this area.

In your Lordships’ House, this effort is led by the noble Lord, Lord Moynihan, who is in his place and has spoken out. However, it would be right at this point to recognise the work of the all-party group which he talked about, because it has indeed been good at keeping up pressure on the Government on this issue. We also miss, yet again, the spirit and enthusiasm of Baroness Heyhoe Flint, who sadly is no longer with us but who was definitely part of the team that includes on our side my noble friends Lady Hayter and Lord Collins, who have managed to keep this issue in front of your Lordships’ House and have got us to where we are today.

Having said that, others have mentioned the problem of resourcing the teams which will have to make sure that the new regulatory process works in practice, and that means trading standards in particular. It is not, as others have said, just a question of resources; it is also a question of matching the technical skills of those who are operating computers to try to cheat ordinary customers out of the ability to buy tickets as they would wish. I am sure that the Minister will have some words to say about that, but I would be grateful if he could make sure that we understand better how the resourcing element of this is going to be met.

Finally, we are still left with a couple of rough ends, and I do not think that we should consider this to be the end of the game. I have yet to have properly established what is a ticket; the legal definition still eludes those who have been working on this issue. It can either be a licence to attend a performance or it can be a piece of real property which, with justification, can be sold on to others. I think that it is a bit of both, and it would be helpful if we could make sure that we put into statute a proper definition of what a ticket is. Once we have that, the rest of the issues which are raised by this whole question of touting and how it operates will be erased.

My Lords, I am delighted to add my voice to those who have spoken, some of whom have of course carried the burden of this subject for quite a long time. A few years ago, I wanted to see David Tennant performing in “Richard II” at the Barbican. Because of the activities of the organisation already named, I was obliged to pay hundreds of pounds for a ticket, greatly inflated from the face value, in order to get a rather poor seat. I have never told my wife about this expenditure and now that I have made my confession on the Floor of the House, I hope that she will not read Hansard. However, I have been a victim of touts and it was only the grandeur of the performance that rescued the whole thing in my mind.

It is of course scandalous that these things take place. It is perhaps unfortunate that trading standards people, who are accustomed to dealing with infractions of this nature and are empowered to do so, are given less than helpful advice when it comes to pursuing matters in this area. The police have all the powers necessary to bring cases and all the rest of it. It seems important that the police are not burdened with what, for them, will be a marginal or lesser activity. They face so many serious things these days. Perhaps we can look at that in due course.

Since I have mentioned drama and quoted Shakespeare, perhaps I can quote the words of the Minister back to him. He said in an earlier debate that,

“with the new offence on the statute book, the Government will work with industry to enforce it. An offence is only worth having if criminal acts are reported. We have industry groups in place that are now willing and able to take action in partnership with our law enforcement agencies”.—[Official Report, 29/3/17; col. 660.]

We are promised constant review of the outcomes of these regulations once we have approved them. Of course that is good, but are we convinced that if we wait a statutory amount of time—a year or two—to monitor what is happening, the police might not feel that this was their priority and we will have rather little to report at that time, and that we cannot anticipate already the likely shortcomings in the way this matter will be implemented?

My children are less concerned with David Tennant at the Barbican than they are with the Arctic Monkeys. Of course, their recent re-emergence to the public saw a prime example of this kind of difficulty. Indeed, it might well be described for all of us as our “Favourite Worst Nightmare”, since that was the name of one of their albums. One commentator at that time said that it is easier to buy a gun in the United States than an Arctic Monkeys ticket in the United Kingdom. Or, as another one said, it is,

“easier to get a reservation at Tranquility Base Hotel & Casino”,

than one of their tickets. That is another one of their albums, course.

It is well enough to play around with words; it is the ordinary public who suffer from these dangerous and profiteering pirateering activities. It is time that we recognise this as something that has to be addressed, which we do and have done. Indeed, looking at some briefing from Ticketmaster, I see for just how long it has been active in the field trying to control these sorts of activities. It is time that we find ourselves not only expressing concern and making provision, but giving power to the people best able to do something about this so that, when we get our promised report back in due course, we will be able to see first, to answer the Minister’s worries, people brought to justice and, secondly, treated righteously before the law.

All of us can express our very real concerns about this aspect of our national life. All of us want to see something done about it. We just hope that this statutory instrument will not only add something that looks right on paper, but achieve some of the objectives we mentioned today.

My Lords, I am grateful for all the contributions. It is clear that this is an issue that is close to the heart, or at least the interests, of many of us. I will respond to some of the specific issues that have been raised, although the statutory instrument itself is very narrow. Most of the issues that have been raised are outside its purview. Nevertheless, they are interesting and deserve an answer.

I pay tribute to my noble friend Lord Moynihan. I have spent many happy hours debating the subject with him. Sometimes I have come off best although normally I have come off worst, but we are pleased that he is pleased with this statutory instrument: it is a beginning. I pay tribute to his knowledge and expertise in this; he certainly helped to improve the Digital Economy Act last year.

The noble Lords, Lord Stevenson, Lord Griffiths and Lord Faulkner, among others, talked a lot about enforcement. Of course, I recognise the need for proper enforcement and therefore I welcome the Competition and Markets Authority’s recent announcement, as part of its enforcement investigation, that it had secured commitments from three of the largest ticketing platforms on additional information to be provided about tickets being resold through their platforms, and that it has notified another, more recalcitrant secondary ticketing platform of its intention to pursue court action if it does not fall into line and address the CMA’s concerns satisfactorily.

As I think was mentioned, we are giving approximately £15 million annually to National Trading Standards for national and cross-boundary enforcement. I welcome, therefore, its announcement at the end of last year that its officers had conducted raids at a number of properties across the UK, resulting in four people being arrested on suspicion of breaches of the Consumer Protection from Unfair Trading Regulations 2008. In addition, the Advertising Standards Authority has recently taken action against the four main secondary ticketing websites, banning the misleading presentation of pricing information on their websites. If the sites fail to comply with this requirement properly, the Advertising Standards Authority will ask trading standards to take further enforcement action on this matter. I think this enforcement work demonstrates that the matter is being taken seriously by the enforcement bodies and that we are prepared to go after those who flout the law or abuse the ticketing market.

I recognise the issue that my noble friend Lord Moynihan raised of the bots themselves, as opposed to the platforms, being based abroad. Of course, that is an issue that is common to many online crimes: if they are not within our jurisdiction, we have to co-operate with our partners abroad. We will do that where it is possible to do so and, of course, as I said before, if they have entities in this country then we will pursue them through enforcement action. I believe there is a Swiss site I referred to earlier for which that is being contemplated at the moment.

Lastly, and this applies also to online gambling, if foreign sites or people are committing offences, one of the ways of looking at that is through the payment mechanisms. Payment providers do not like dealing with people who are committing crime, so that is an issue we could look at. My noble friend Lord Moynihan referred specifically to viagogo, and I think the noble Lord, Lord Griffiths, or it may have been the noble Lord, Lord Stevenson, talked about what my honourable friend the Minister for Digital and the Creative Industries said about viagogo.

As I said, the enforcement agencies are committed to investigating breaches of consumer law and we welcome the CMA’s announcement last month that it had secured commitments from three of the top sites, and notified a fourth that it will pursue court action. We should also welcome the Advertising Standards Authority’s announcement at the end of May that it has referred viagogo to National Trading Standards for non-compliance with its rulings. We also welcome FIFA’s decision to file a complaint against viagogo and to protect fans by warning that it will cancel any World Cup tickets identified as having been purchased through the Switzerland-based website. My honourable friend the Minister for Digital and the Creative Industries was clear that her advice to fans is not to buy tickets for the World Cup from viagogo.

Can my noble friend the Minister confirm that the Government are of the view that trading standards do not lack powers in connection with bots under current legislation?

I do not think they lack powers with regard to bots that are based in this country, but the noble Lord’s point, I believe, was that the actual ticket-purchasing software that is based abroad is in the same position. The offence applies to bots if the activity takes place. It is the enforcement that is more difficult. The offence applies as long as it is to buy tickets for events in the UK.

The Minister mentioned earlier that the answer may lie in following the money, which has worked with regard to gambling and child protection. Does he think that this is now a real possibility in this area? Clearly, if these bots are operating from abroad and the instructions are from extraterritorial areas that we cannot reach, the right thing to do is to follow the money.

I have to be careful—I may not have been as careful as I should have been—to distinguish between the bots themselves and the ticketing platforms. Obviously, it is more difficult with regard to the bots, which are, in effect, ticket-purchasing software that could be anywhere, on any computer. I do not think I said that we were doing this. I am just highlighting the fact that following the money is important. I do know that payment providers such as Visa and PayPal do not want to deal with organisations or people who are committing an offence.

The noble Lord, Lord Faulkner, asked about the effectiveness of the Criminal Justice and Public Order Act 1994, which creates an offence,

“for an unauthorised person to … sell a ticket for a designated football match”.

I am not an expert and I will have to follow this up but I think the problem is that that was enacted following the recommendation in Lord Justice Taylor’s final report on the Hillsborough stadium disaster. Lord Justice Taylor was specific that the offence be limited to football because of its unique public order risk. I am not sure it is right to try to address other issues through that. It was for public order reasons more than ticket resale and pricing reasons. But I am happy to look at that and get the noble Lord more detail from someone who understands the law on this.

I am grateful for that answer. If the Minister is able to find out some more information, that would be very helpful. The point about the 1994 Act was to try to achieve proper segregation at football grounds for public order reasons. The difficulty was that if tickets were freely available from unauthorised sellers in the street—this was before the days of internet purchase—it would not be possible to segregate crowds. That is what Lord Justice Taylor was concerned about. But the fact that that offence exists still makes it illegal for companies which are engaged in the secondary market to sell football match tickets unless they have the express permission of the football authorities.

I understand and am grateful to the noble Lord for that. I absolutely agree that the offence was instituted for public safety reasons. But I will go into that in a bit more detail.

The noble Earl, Lord Glasgow, asked about theatre companies and tickets being concentrated in four companies. I have to plead the fact that this is not actually anything to do with this measure. Obviously, how those companies allocate tickets is a matter for them. As far as the Competition and Markets Authority is concerned, that is exactly its job—to look at competition—so the matter could be taken up with that authority.

The noble Lord, Lord Stevenson, raised us to a higher plane, as always, when he asked what the definition of a ticket was. What is a ticket? I think that the nature of tickets has changed with technological developments. If this appears to be an issue when we review how the regulations are operating, we will consider how to address it. I should say at this stage that I said during the passage of the Bill that, once we had let the regulations bed in, we would look at how the technological developments were working and whether the regulations were sufficient. I said that we would consider that in the future when we saw how the regulations were working. As with many issues to do with the internet, I do not pretend that this will solve 100% of the problems with the resale of tickets, but the fact that we are creating an offence that stops multiple tickets being bought by machines to prevent fans getting a fair chance will solve a lot of problems. We will have to consider in future whether any other things need to be addressed—not least because of technological developments, which are moving fast.

I hope that I have covered most or all of the issues raised. With these regulations, alongside the ticket information requirements in the Consumer Rights Act and the enforcement work of the Competition and Markets Authority, National Trading Standards and the Advertising Standards Authority, we hope that the events industry will have the tools it needs to improve the opportunities for fans to buy tickets for events at a reasonable price and to protect them from being exploited. I ask that these draft regulations be approved.

Motion agreed.

Sitting suspended.