Live Nation Entertainment Inc.'s Ticketmaster unit has reached a settlement with federal regulators to refund money to people who bought marked-up tickets to 14 Bruce Springsteen concerts last year.
The settlement, announced Thursday by the Federal Trade Commission, will give customers the difference between the marked-up price and the face value of their tickets. FTC Chairman Jon Leibowitz said the refunds could go to thousands of people and ultimately total more than $1 million.
The FTC launched an investigation into Ticketmaster's practices last year after Springsteen fans who tried to buy tickets for concerts in May and June encountered a "no tickets found" message on Ticketmaster's Web site. The investigation found that even though face-value tickets were still available in many cases, customers were redirected to Ticketmaster's TicketsNow.com resale site to buy tickets that were in some cases two, three or even four times face value.
According to the FTC complaint, which was filed in U.S. District court in Illinois, TicketsNow charged a markup of 2 percent to 8 percent, as well as a 15 percent fee, on the Springsteen tickets.
The FTC said the company used "deceptive bait-and-switch tactics." It also said the company displayed the same misleading Web page to consumers trying to buy tickets to other events between October 2008 and February 2009.
In addition, the agency said that Ticketmaster failed to tell buyers that many of the resale Springsteen tickets advertised on the TicketsNow.com site were not actually "in hand," but rather were simply offers to try to find tickets. As a result, the FTC said, many of those "phantom tickets" never materialized even though Ticketmaster kept the sales proceeds for several months before notifying customers that the tickets did not exist.
The settlement with the FTC will require TicketsNow.com to clearly disclose whether tickets advertised on the site are in hand or merely speculative and to clearly indicate that it is a resale site that offers tickets at resale prices.
The agency is also sending warning letters to other ticket resale companies urging them to review their own Web sites to ensure that they do not make any misleading statements about the status of tickets.
Live Nation Entertainment denies that there were any face-value Springsteen tickets available when customers were redirected to the TicketsNow.com site — even though it said at the time that its systems had a "glitch." The company stressed in a statement that the FTC did not find "any inappropriate transfer or diversion of tickets to TicketsNow or any other resale entity."
The company said it is pleased with the terms of the FTC settlement and looks forward to building a "great company that serves consumers and artists with easy and transparent ticketing solutions." Ticketmaster, the nation's largest ticket-seller, and Live Nation, the world's largest concert promoter, merged last month after a yearlong antitrust review by the Justice Department.
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