Taylor Swift Eras ticket markup case: Judge sides with FTC over MD reseller

Listen to this article

In a blow for a Pikesville-based reseller accused of marking up Taylor Swift tickets, a judge in Maryland ruled Tuesday that a federal law aimed at curbing bots from acquiring tickets online also applies to nonautomated ticket purchases.

The ruling means that the Federal Trade Commission‘s case against Key Investment Group can proceed, though U.S. District Court for Maryland Judge George Levi Russell III noted that the issue of whether Ticketmaster condoned the reseller’s tactics could be considered at a later stage.

The FTC declined to comment. A spokesperson for the resale firm did not immediately return a request for comment Wednesday.

The FTC sued Key Investment Group last year, alleging the firm had used fake Ticketmaster accounts, credit card numbers, alternate IP addresses and other methods to buy hundreds of thousands of tickets, making $1 million in revenue by marking up seats at Swift’s hotly contested Eras Tour.

In a motion to dismiss and a pre-emptive lawsuit seeking to block the FTC’s suit, the ticket reseller insisted that it didn’t violate the Better Online Ticket Sales, or BOTS, Act because it didn’t use bots. Instead, the FTC alleges, the firm used various tactics to throw off Ticketmaster’s internal controls, including sham identities, external hardware and crowdsourcing.

Key Investment Group, which was behind retailers such as TotalTickets.com and Front Rose Tix, said the FTC litigation “threatens to dismantle the secondary ticket market for live events.” It argued that the commission’s interpretation of the BOTS Act was “inconsistent” with the statute’s text, legislative history and intent.

In his Wednesday ruling, Russell wrote that he was not convinced.

“The statute unambiguously applies to ‘any person’ and not just to ‘bots,'” he wrote, noting that the harms of exorbitant ticket prices could be caused “either by ‘bots,’ or humans who write the code behind the ‘bots,’ or individuals who work in concert to recreate what bots otherwise accomplish.”

Russell noted in his order that courts “have rejected relying on a statute’s name or acronym as evidence of the law’s plain meaning.” He found that the FTC adequately alleged that the reseller circumvented Ticketmaster security measures but noted that the FTC could fail to establish liability following future arguments over whether Ticketmaster understood, permitted or encouraged the reseller’s tactics.

Russell also issued a separate order allowing another case — in which Key Investment Group challenged the agency’s action before it was filed — to proceed as well. In that decision, Russell found that the FTC’s lawsuit does not preclude the reseller from seeking a declaratory judgement in the other case.

Signed in 2016 during the final weeks of Barack Obama’s presidency, the BOTS Act makes it unlawful for “any person . . . to circumvent a security measure, access control system, or other technological control or measure on an Internet website . . . used by the ticket issuer to enforce posted event ticket purchasing limits or to maintain the integrity of posted online ticket purchasing order rules.”

The FTC is seeking civil penalties for each violation of the BOTS Act by the ticket reselling firm and a permanent injunction preventing future violations.

It alleged in a complaint that the firm had made over $5.6 million in revenue over the course of about 18 months by purchasing more than a dozen tickets for over 3,000 different events.

More than a fifth of that revenue came from Swift’s Eras tour. In a five-month period, the firm bought 2,280 tickets for 38 Swift concerts, despite a six-ticket limit on the singer’s tour stops, according to the complaint.

This story has been updated with the FTC’s decline to comment.