The U.S. Federal Trade Commission (FTC) and a coalition of seven state attorneys general have filed a lawsuit against Ticketmaster and its parent company, Live Nation Entertainment Inc. The lawsuit, submitted in California federal court, accuses the companies of employing illegal tactics that inflate ticket prices for consumers.

The FTC claims that Ticketmaster has misled both artists and fans by advertising lower ticket prices than what consumers ultimately pay. The agency alleges that Ticketmaster falsely asserts strict limits on ticket purchases, while in reality, it collaborates with ticket brokers who circumvent these limits. According to the FTC, these brokers use fake accounts to acquire large quantities of tickets, which they then resell at significantly higher prices on Ticketmaster's platform. The FTC states that Ticketmaster profits from the additional fees collected from these resale transactions.

"Ticketmaster has not been honest about its pricing," said FTC Chair Andrew Ferguson. He noted that the company can "triple dip" on fees, earning money from the initial ticket sale and from both the buyer and seller during resales. The FTC estimates that Ticketmaster generated approximately $11 billion in fees from primary and resold tickets between 2019 and 2024.

The lawsuit highlights that Ticketmaster's actions violate the FTC Act, which prohibits deceptive practices, as well as the Better Online Ticket Sales Act (BOTS Act), enacted in 2016 to combat large-scale ticket scalping. The BOTS Act specifically bans the use of automated methods to bypass ticket purchase limits.

The potential penalties for Ticketmaster could reach billions of dollars, as the law allows for fines exceeding $53,000 per violation. The FTC's complaint indicates that Ticketmaster was aware of the significant impact that enforcing ticket limits would have on its revenue, estimating a potential loss of at least $220 million.

The lawsuit comes amid ongoing scrutiny of Ticketmaster's practices, particularly following a chaotic ticket sale for Taylor Swift's Eras Tour in 2022, which drew criticism from lawmakers. In a 2023 hearing, senators questioned Live Nation about its ticketing practices. The Biden administration has also taken steps to address consumer protection in the ticketing industry, including a ban on junk fees that requires Ticketmaster to display the full price of tickets upfront.

In addition to the FTC's lawsuit, the U.S. Department of Justice is pursuing a separate case aimed at breaking up Live Nation and Ticketmaster, arguing that their merger has created a monopoly in the ticketing market. This case is set for trial in March 2024.

The FTC's actions reflect a broader effort to regulate the ticketing industry and protect consumers from deceptive practices. The agency has intensified its enforcement of ticket sales regulations, particularly under the current administration, which has prioritized consumer protection initiatives.