H. R. 950
IN THE HOUSE OF REPRESENTATIVES
March 8, 2011
Mr. Matheson (for himself and Mr. Terry) introduced the following bill; which was referred to the Committee on Energy and Commerce
To prohibit restrictions on the resale of event tickets sold in interstate commerce as an unfair or deceptive act or practice.
This Act may be cited as the
Congress finds the following:
Sponsors and promoters of major music, sporting, and theatrical events are increasingly seeking to control the resale of tickets to such events in the secondary market, by employing restrictive State laws, imposing and enforcing onerous contractual or license terms, and imposing technological barriers on ticket resale.
Such restrictions and downstream controls substantially impede interstate commerce in event tickets, drive up ticket prices, reduce availability of tickets to interested purchasers, narrow the choices available to the public, and are unfair to consumers.
Eliminating such restrictions and applying free market principles to the secondary market in event tickets would encourage a robust competitive marketplace in such tickets, would promote the healthy growth of electronic commerce in such tickets in online marketplaces, and would be in the best interests of ticket purchasers, fans, and the general public.
Purchasers of event tickets, whether in the primary or secondary ticket markets, are entitled to minimum consumer protection standards, including provisions for full refunds of ticket purchases in appropriate circumstances.
In order to achieve a nationwide free market in resale of event tickets, Congress must act to preempt State or local laws that unjustifiably restrict such resales, while preserving State and local authority to legislate or regulate to prevent fraud, maintain public order, or vindicate other legitimate State and local interests.
In this Act:
The term Commission means the Federal Trade Commission.
The term event means any concert, theatrical performance, sporting event, exhibition, show, or similar scheduled activity, taking place in a venue with a seating or attendance capacity exceeding 1,000 persons—
that is open to the general public;
for which an admission fee is charged; and
that is promoted, advertised, or marketed in interstate commerce or for which event tickets are generally sold in interstate commerce.
The term event ticket means any physical, electronic, or other form of a certificate, document, voucher, token, or other evidence indicating that the bearer, possessor, or person entitled to possession through purchase or otherwise has—
a revocable or irrevocable right, privilege, or license to enter an event venue or occupy a particular seat or area in an event venue with respect to one or more events; or
an entitlement to purchase such a right, privilege, or license with respect to one or more future events.
The term person means any natural person, partnership, corporation, association, or other legal entity, including any person acting under color or authority of State law.
The term resale includes any form of transfer, or offering to transfer, of possession or entitlement to possession of an event ticket from one person to another, with or without consideration, whether in person or by means of telephone, mail, delivery service, facsimile, Internet, email, or other electronic means. The term resale does not include the initial sale of an event ticket by the ticket issuer.
The term State means any of the several States, the District of Columbia, the Commonwealth of Puerto Rico, or any other territory or possession of the United States.
The term ticket issuer means any person that first makes event tickets available, directly or indirectly, to the general public, and may include—
the operator of a venue;
the sponsor or promoter of an event;
a sports team participating in an event or a league whose teams are participating in an event;
a theater company, musical group or similar participant in an event; or
an agent of any such person.
The term venue means the theater, stadium, field, hall, or other facility where an event takes place.
Except as otherwise provided in this Act, it shall be unlawful for any ticket issuer to prohibit or restrict the resale or offering for resale of an event ticket by a lawful possessor thereof.
Activities prohibited to ticket issuers by this Act include—
purporting to impose license or contractual terms on the initial sale of event tickets (including terms printed on the back of a physical ticket) that prohibit resale of the ticket, or restrict the price or other terms and conditions under which a ticket may be resold;
requiring the purchaser of a ticket, whether for a single event or for a series or season of events, to agree not to resell the ticket, or to resell the ticket only through a specific channel approved by the ticket issuer;
bringing legal action, based on an unlawful prohibition or restriction on resale of an event ticket, against—
a purchaser who resells or offers to resell an event ticket without permission of the ticket issuer, or in violation of a restriction purportedly imposed by the ticket issuer;
persons who facilitate or provide services for the resale of event tickets without such permission or in alleged violation of such a restriction; or
the operator of a physical or electronic marketplace in which a ticket is offered for resale without such permission or in alleged violation of such a restriction;
imposing any penalty on a ticket purchaser who resells or offers to resell an event ticket without permission or in violation of a restriction purportedly imposed by the ticket issuer, or treating such a purchaser in any material way less favorably than a similarly situated purchaser who does not resell or offer to resell an event ticket, or who complies with resale restrictions purportedly imposed by the ticket issuer;
employing technological means, including any means of promoting, carrying out, documenting or verifying sales of event tickets, or of controlling entry to venues by lawful possessors of event tickets, that have the effect of prohibiting or restricting the ability of purchasers to resell such tickets; or
seeking to limit or restrict the price, or to impose a minimum or maximum price, at which an event ticket may be resold.
Consumer Protection Minimum Standards
It shall be unlawful for any person to engage in the primary or resale market for event ticket sales in any manner specified in subsection (b) without complying with the consumer protection minimum standards specified in this section with regard to event ticket sales.
This section applies to all persons engaged in the trade or business of—
acting as a ticket issuer;
engaging in the resale of event tickets, except in the case of an individual engaged in resales of no more than 25 tickets in any one year; or
providing a physical or electronic marketplace for the sale or resale of event tickets by other persons.
A person subject to this section may comply with its provisions by conducting its sales or resales of event tickets in a physical or electronic marketplace that provides the consumer protection minimum standards specified in this section.
All persons subject to this section shall—
maintain a toll-free telephone number for complaints and inquiries regarding its activities in the sale or resale of event tickets; and
implement and reasonably publicize a standard refund policy that meets the minimum standards stated in subsection (d).
Requirements of refund policy
The standard refund policy described in subsection (c)—
shall provide a consumer who purchases an event ticket from the person a full refund if—
the event is canceled before the scheduled occurrence of the event, and is not rescheduled;
the event ticket sold by the person and received by the purchaser is counterfeit;
the event ticket has been canceled by the ticket issuer for nonpayment by the original purchaser, or for any reason other than an act or omission of the consumer;
the event ticket materially and to the detriment of the consumer fails to conform to the description provided by the seller; or
the event ticket was not delivered to the consumer prior to the occurrence of the event, unless such failure of delivery was due to any act or omission of the consumer;
shall include in a full refund the full price paid by the consumer for the event ticket, together with any fees charged in connection with that purchase, including convenience fees, processing fees, at-home printing charges, shipping and handling charges, or delivery fees; and
may condition entitlement to a refund upon timely return of the ticket purchased, and may include reasonable safeguards against abuse of the policy.
Requirements as minimum requirements
Nothing in this section shall be construed to prohibit any person subject to this section from implementing consumer protection policies that exceed the minimum standard set forth in this section, and that are otherwise compliant with this Act.
Unfair and deceptive act or practice
Any violation of section 4 or 5 shall be treated as a violation of a rule under section 18 of the Federal Trade Commission Act regarding unfair or deceptive acts or practices.
Enforcement by the Federal Trade Commission
The Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction, powers and duties, as though all applicable provisions of the Federal Trade Commission Act were incorporated into and made a part of this Act.
Enforcement by States
In any case in which the attorney general of a State, or an agency of a State responsible for consumer protection, has reason to believe that an interest of the residents of that State has been or is adversely affected by any person who violates section 4 or 5 of this Act, the attorney general or the State agency, as parens patriae, may bring a civil action on behalf of the residents of the State in a district court of the United States of appropriate jurisdiction—
to enjoin further violation of section 4 or 5 by the defendant; or
to obtain damages on behalf of residents of the State, in an amount equal to the greater of—
the actual monetary loss suffered by such residents; or
the amount determined under paragraph (2).
For purposes of paragraph (1)(B)(ii), the amount determined under this paragraph is the amount calculated by multiplying the number of violations by up to $100, with each ticket subject to an unlawful prohibition or restriction, or sold or offered to be sold in violation of section 5, counted as a separate violation.
For any violation of section 4 or 5 with respect to any one event, the amount determined under subparagraph (A) may not exceed $1,000,000.
In the case of any successful action under paragraph (1), the court, in its discretion, may award the costs of the action and reasonable attorney fees to the State.
Rights of Federal regulators
The State shall serve prior written notice of any action under paragraph (1) upon the Federal Trade Commission and provide the Commission with a copy of its complaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Federal Trade Commission shall have the right—
to intervene in the action;
upon so intervening, to be heard on all matters arising therein;
to remove the action to the appropriate United States district court; and
to file petitions for appeal.
For purposes of bringing any civil action under paragraph (1), nothing in this Act shall be construed to prevent an attorney general of a State from exercising the powers conferred on the attorney general by the laws of that State to—
administer oaths or affirmations; or
compel the attendance of witnesses or the production of documentary and other evidence.
Venue; service of process
Any action brought under paragraph (1) may be brought in the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code.
Service of process
In an action brought under paragraph (1), process may be served in any district in which the defendant—
is an inhabitant; or
maintains a physical place of business.
Limitation on State action while Federal action is pending
If the Commission has instituted a civil action or an administrative action for violation of this Act, no State attorney general, or official or agency of a State, may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the Commission for any violation of this Act alleged in the complaint.
Effect on State Law
Preemption in general
Except as otherwise provided in this section, this Act preempts and supersedes any inconsistent statute, regulation, or rule of a State or political subdivision of a State that purports to permit any action prohibited by this Act, but only to the extent of such inconsistency.
Preemption of Antiscalping Laws
This Act preempts and supersedes any statute, regulation, or rule of a State or political subdivision of a State that limits the price at which an event ticket may be resold.
Nothing in this Act shall be construed to preempt the applicability of the law of a State or political subdivision of a State that—
regulates or prohibits the sale or resale of event tickets—
based on proximity of the location of sale to the location of a venue; or
in a manner that constitutes disorderly conduct or breach of the peace;
empowers the operator of a venue or its agent to deny admission to any person, or to eject any person from an event, in order to preserve public safety or order, or to prevent or restrict the admission of minors;
prohibits fraud, deception, or similar practices in connection with the sale or resale of tickets, or prohibits the sale or resale of counterfeit tickets;
treats a ticket as a license for any purpose other than the prohibition or restriction of resale;
regulates the initial sale of event tickets by limiting the number of tickets that may be purchased from a ticket issuer by a single person; or
prohibits the intentional circumvention of technological means employed by ticket issuers to enforce limitations on the number of tickets that may be purchased by a single person, or the sale or distribution of devices, computer programs, or other tools for the purpose of such circumvention.
Nothing in this Act shall be interpreted to invalidate restrictions on the resale of tickets imposed by—
sponsors or promoters of events intended solely to benefit charitable endeavors, for which all tickets are distributed free of charge;
not-for-profit educational institutions, with respect to athletic events involving athletes or teams of such institutions, to the extent that such restrictions apply to tickets initially distributed by the institution to—
students, faculty, staff members, or alumni without charge; or
members of bona fide booster organizations consisting of those making substantial financial contributions to the institution.
This Act shall take effect 1 year after the date of enactment, and shall apply to tickets for all events which occur on or after the effective date.