US FTC sues event ticket brokers using bots
Many of us are looking forward to the end of the COVID-19 lockdown and the return to attending live sporting events, concerts, etc. Even though you will be able to attend events in person, chances are you will purchase your tickets online, or, if that fails, through a ticket broker. You may have wondered why ticket brokers always seem to get so many tickets so quickly.
The US Congress was concerned and in 2016, enacted the Better Online Ticket Sales Act (“BOTS Act”). The BOTS Act gives the US Federal Trade Commission (FTC) authority to take enforcement action against individuals and companies that use bots or other means to circumvent limits on online ticket purchases. The BOTS Act includes two important provisions:
- It is unlawful for any person to “circumvent a security measure, access control system, or other technological control or measure on an Internet website or online service that is used by the ticket issuer to enforce posted event ticket limits or to maintain the integrity of posted online ticket purchasing order rules.” 15 U.S.C. § 45c(a)(1).
- An “event” is:
(A) is open to the general public; and
(B) is promoted, advertised, or marketed in interstate commerce or for which event tickets are generally sold or distributed in interstate commerce.
Three FTC cases
On January 14, 2021, the FTC, through the US Department of Justice, brought its first court proceeding under the BOTS Act, filing federal court complaints against three New York ticket brokers. (United States v. Cartisim Corp., No. 21-cv-212 (E.D.N.Y. Jan. 14, 2021); United States v. Concert Specials, Inc., No. 2:21-cv-00214 (E.D.N.Y. Jan. 14, 2021); and United States v. Just in Time Tickets, Inc., No. 2:21-cv-00215 (E.D.N.Y. Jan. 14, 2021).) The FTC settled all three cases on January 19. The defendants did not admit or deny any wrongdoing.
Each ticket broker had previously signed an Assurance of Discontinuance with the New York Attorney General in 2016. The New York Attorney General had complained that the defendants’ use of ticket bots violated New York state law by using bots to bypass security measured to purchase tickets.
In the FTC cases, each of the defendants allegedly used a variety of ways to circumvent security and technological measures, including using ticket bots, CAPTCHA bypass software, IP proxies, fictitious names and addresses, and multiple credit card accounts. This chart summarizes the FTC complaints against each defendant relating to activity from 2017 to the present:
| Defendant | # IP addresses | # tickets purchased | # accounts used | # of credit cards used | # of names used | # of addresses |
| Cartisim | 8,000 | 24,478 | 120 | 150 | 115 | 110 |
| Concert Specials | 19,000 | 82,925 | 900 | 450 | 650 | 550 |
| Just in Time Tickets | 12,500 | 48,451 | 436 | 450 | 320 | 280 |
The civil penalties for violations of the BOTS Act vary by year and are indexed to inflation. Each violation through January of 2018 had a civil penalty in the amount of $40,000; through February 2019 it increased to $41,484; and from February 14, 2019 through the present, it increased to $42,530. Note that there is no requirement that the penalties be limited to the defendants’ revenues or profits. Consequently, the FTC’s orders with the defendants included penalties that exceeded their revenues:
| Defendant | Civil Penalty | Revenue |
| Cartisim | $4,400,000 | $3,800,000 |
| Concert Specials | $16,000,000 | $13,700,000 |
| Just in Time Tickets | $11,200,000 | $8,600,000 |
Acting FTC Chair Slaughter acknowledged that the penalties exceeded revenues, although the amounts were subsequently reduced based upon each defendants’ financial statements indicating a lack of ability to pay. She also warned future violators of the BOTS Act: “if they get caught, they will not only have to disgorge the profits they made from cheating but also pay a penalty that may be many multiples thereof.”