The Federal Trade Commission has filed a lawsuit against a ticket resale company, alleging that it used illegal methods to secure tickets and resell them at inflated rates for popular concerts, including Taylor Swift’s Eras Tour.
On Monday, the FTC filed the suit, reviewed by Variety, against Key Investment Group and affiliated companies including Epic Seats and Totally Tix LLC, accusing them of violating the Better Online Ticket Sales (BOTS) Act and making millions off of price-gouged tickets on the secondary market.
Several of Key Investment Group’s executives were named in the suit including CEO Yair D. Rozmaryn, CFO Elan N. Rozmaryn and CSO Taylor Kurth. The FTC states that the company violated the FTC Act and the BOTS Act, which is intended to prevent parties from circumventing security measures and ticket caps on shows.
In a statement to Variety, a representative for Key Investment Group said that the suit threatened to dismantle the secondary market and that they would vigorously defend themselves. “In an unprecedented move, the FTC has twisted the intent of the Better Online Ticket Sales (BOTS) Act, a law designed to target malicious software, into a weapon against legitimate businesses and consumers,” they stated. “Under the FTC’s interpretation, anyone who purchases more than four tickets or uses more than one account could be deemed in violation of federal law. That outcome is not only illogical, it’s absurd.”
The suit claims that the company used thousands of Ticketmaster accounts to buy tickets; concealed their identities behind proxy or false IP addresses; and used thousands of virtual and traditional credit card numbers. The FTC accuses them of buying at least 379,776 tickets from Ticketmaster over a year-long period for $57 million, which they then resold on the secondary marketplace for $64 million at the expense of concertgoers.
The FTC alleges that the defendants purchased 2,280 tickets to 38 Swift shows, paying $744,970.29 and reselling them for $1,961,980.65 for a $1,217,010.36 profit. For one Swift concert in March 2023, they claim that the defendants used 49 different accounts to buy 273 tickets and then resold them to make $119,227.21 in revenue.
They also claim the same was done for a Bruce Springsteen concert in Sept. 2023, using 277 different accounts to buy 1,530 tickets and earn $20,900.84 in revenue.
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“President Trump made it clear in his March Executive Order that unscrupulous middlemen who harm fans and jack up prices through anticompetitive methods will hear from us,” said FTC Chairman Andrew N. Ferguson in a statement. “Today’s action puts brokers on notice that the Trump-Vance FTC will police operations that unlawfully circumvent ticket sellers’ purchase limits, ensuring that consumers have an opportunity to buy tickets at fair prices.”
In July, Key Investment Group filed its own suit against the FTC, claiming that they were compliant with the BOTS Act and that shutting down the company would decimate the secondary ticketing industry for concerts.
From Variety US