ac respondsSupervisor Authority for Consumers and Markets (ACM) must start an investigation into Ticketmaster’s practices in the Netherlands. This is what several experts say after the fuss about ticket sales for the Lowlands festival. “A competitor is simply being pushed out of the market here.” Against it AP an ACM spokesperson said on Monday that he is keeping a ‘close eye’ on ticket sales in the Netherlands.
Ticketmaster – the largest ticket company in the world – is under fire from both consumers and members of parliament. The direct reason is the sale for the Lowlands festival, where second-hand tickets cost more than 100 euros more than the original ticket price of 300 euros. GroenLinks, SP, Party for the Animals and rival ticket giant Ticketswap also welcome an independent investigation.
Not only the retailer can earn extra money thanks to the Ticketmaster platform, but Ticketmaster itself as well. Because they charge service costs twice for one ticket, which amounts to more than 40 euros at these prices. This is a sensitive issue, because both Ticketmaster and the organizer of Lowlands, Mojo, fall under the powerful American company Live Nation. A judicial investigation into the entertainment company is already underway in the US because it would disrupt the free market.
This now seems to be the case in the case of Lowlands. To their own surprise, the popular ticket giant Ticketswap was suddenly sidelined just before ticket sales. A remarkable and daring move, say experts. “It seems that Ticketmaster is abusing a monopoly position in the ticket sales market by excluding competitors such as Ticketswap and asking exorbitant prices,” says Timo Klein, an expert in the field of competition economics and affiliated with Utrecht University. “By closing the second-hand market to competitors, Ticketmaster is free to ask what they want. I am becoming more and more convinced that Ticketswap can make this a hard case at ACM.”
Tom Ottervanger, professor of European law at Leiden University, also sees a study happening, but at the same time has reservations. “Even if Ticketmaster were to have a dominant position in the sense of competition law, it is rare that a high price for a product or service is qualified as ‘abuse’. This has occasionally happened when the price is excessive in relation to the investment and costs. ACM will have to investigate that.”
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I am becoming more and more convinced that Ticketswap can make this a hard case at ACM
In anticipation of a possible new law, Best Kept Secret is already setting a good example. This festival in Brabant also ignores external parties in ticket sales, with the big difference that in resale they opt for a maximum price of 100 percent of the ticket price, plus only 10 euros in service costs. This makes it impossible for traders to make a profit.
‘Form of exclusion’
The fact that MPs are now stepping into the breach in the discussion about Lowlands is ‘dramatically exaggerated’, says Maarten Pieter Schinkel, professor of economics at the University of Amsterdam. Ticketswap and Ticketmaster both limit the profit for the seller to 20 percent. It would otherwise be much higher, because many people are willing to pay a lot more for Lowlands tickets. “You don’t want a free market for resale: the price is only driven up there.” In the end, there is a percentage difference in the service costs. “So this is about tens of thousands of jobs. That is manageable, and with Ticketmaster you have a guarantee that you will enter.”
Schinkel is critical of the sideline of Ticketswap. “It is a form of exclusion that is in principle prohibited under competition law. There is a risk that the consumer will be the victim of this, if Ticketmaster decides to increase the service costs, for example.” Schinkel fears for the survival of Ticketswap if this aggressive strategy continues. “After all, their service is in fact taken over, but with greater card authenticity certainty.”
Read also: Consumers deserve better protection against high concert ticket prices
Professor Marjan Olfers confirms this. “A competitor is simply being pushed out of the market here.” Ticketswap itself also states that the ‘saga around Lowlands is only the beginning’.
Having a dominant position is not prohibited in the Netherlands, says an ACM spokesperson. “But appropriating monopoly power through distortion of competition is.” The watchdog never makes any statements about ongoing investigations. She is familiar with the consternation surrounding Lowlands. “We know this is going on. We are not deaf or blind. But we never announce an investigation in advance. With this we want to prevent companies from shredding evidence.”
Resold for 1400 euros
According to experts, Ticketmaster has acquired a bad reputation from the madness surrounding the concert tickets for Adele in Ziggo Dome. That performance sold out quickly. However, the tickets sold were resold for up to 1200 euros excluding a 200 euros ‘reservation fee’ through unethical sites such as Seatwave, which was then part of Ticketmaster. At the request of the minister, ACM conducted an investigation, but found no evidence that the high ticket prices were unacceptable.
If there are few tickets available, while many people want a ticket, it makes sense for prices to be inflated, the authority concluded in 2016. Two years later, Ticketmaster still pulled the plug on Seatwave due to continued criticism and announced its own service , with the promise that people can exchange tickets with each other “for the purchase price or less.” That promise has therefore not been fulfilled: Ticketmaster allows a 20 percent price increase, and charges an additional service fee.
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Whether it’s Ticketswap, Ticketmaster or an extortionate site like Viagogo, I think resale as a revenue model should come to an end
Four years later, an end to the extortionate trade in concert tickets finally seems in sight. A motion to legally limit winnings on cards has been passed by a large majority. Next month, State Secretary Gunay Uslu (Media & Culture) will respond. With a new law, MP Peter Kwint (SP) wants to take an example from Belgium. There it has long been impossible to make a profit through resale percentages. “Whether it’s Ticketswap, Ticketmaster or an extortionate site like Viagogo, I think resale as a revenue model should come to an end. And service charges should be in reasonable proportion to what you get. That is clearly not 40 euros.”
Live Nation became the world’s largest concert promoter in 2010 when it bought Ticketmaster. There were already signals within the music industry that the company is threatening to get a monopoly on concerts and festivals. Almost three-quarters of ticket sales are now in their hands and they own dozens of concert halls, including Ziggo Dome and Afas Live. Artists – also in the Netherlands – are often forced to do business with the Americans because otherwise it will be impossible to get booked. The US regulator approved the merger at the time, subject to the company adhering to certain agreements, including an agreement not to act aggressively against music venues that use a different ticketing service.
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