Ontario's new ticket sales law could backfire for fans, critics warn

Entertainment industry stakeholders are complaining that imminent changes in Ontario's rules around live event ticket sales will drive up prices, provide less protection from fraud and do little to improve transparency as the government had promised.

Alan Cross, a broadcaster, blogger and music historian, put it bluntly in a recent piece on his website: "The Ontario government just blew it with its new concert ticket pricing laws."

The Ticket Sales Act, part of a larger consumer protection bill, passed on Wednesday. The Liberals have a majority and passed the legislation without the help of the Progressive Conservatives or NDP — both parties voted against Bill 166. 

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The bill, which bans the use of bot technology and overhauls other areas of ticket selling, has been in the works for more than a year. Bot technology is software that allows users to circumvent website security and rapidly buy swaths of tickets.

Some of the bill's key measures were in response to the outcry from Tragically Hip fans who couldn't get their hands on tickets or paid exorbitant amounts on resale websites when the beloved band went on its final tour in the summer of 2016.

Attorney General Yasir Naqvi said Tuesday the legislation will make Ontario stand out globally.

"We brought a very important bill dealing with making sure we are putting fans first," Naqvi told CBC News.

But some of the ticket industry's heavyweights, like StubHub, warned the government is doing the opposite.

Unintended consequences

"They have created a bill that is going to have many unintended consequences and ultimately doesn't do what it was meant to do," said Jeff Poirier, general manager for StubHub in Canada, in an interview before the vote.

"I would say that passage of this bill will be regressive versus progressive in nature."

It's a message the company echoed after the bill passed, saying in an open letter that the legislation was a "disappointment" for the ticket industry and fans and will be "known more for its unintended consequences than its protection of fans like you."

One of the biggest complaints from industry players is the resale price cap of 50 per cent above face value. StubHub and others tried to push back on that, arguing that it will drive sales off their legitimate websites to elsewhere on the internet where there are no protections against fraud.

They cited jurisdictions in the United States that dropped price caps because they weren't leading to lower prices or increased access to tickets.

"Prices end up going up, supply goes down and then these transactions are going to move off of secure platforms, which is the whole thing we want to reverse," said Poirier.

Erin Benjamin, executive director of Music Canada Live, which represents ticket sellers, venues, promoters and others involved in live music events, agreed.

"To try and regulate ticket sales via price caps, we believe, because it's been proven, just drives illegal activity into the darkest corners of the internet," she said. Benjamin said fans can expect to pay more with less certainty that their tickets are real.

Imposing price caps is also a "slippery slope" of interfering in the free market and the principles of supply and demand, said Benjamin.

'Fans really want that cap' 

"Fans really want that cap on resale," Naqvi said in response to the criticism.

The government argues the cap will reduce the incentive for people to buy tickets, with or without the help of bot technology, and then immediately resell them for inflated prices. Taking away that incentive could help keep more tickets in the primary market and available for fans, it says.

One measure it did back down on has to do with transparency.

In the original bill ticket sellers would have been required to disclose how many tickets would be available for general sale, but that was taken out of the final version. It would have helped expose how many tickets are holdbacks, which venues, artists, and promoters hang on to for their own purposes or for direct marketing campaigns such as fan loyalty programs.

StubHub argued in favour of this provision, but Ticketmaster and Music Canada Live lobbied to scrap it.  

Benjamin said because ticket inventory is fluid leading up to an event, availability can change. Ticketmaster argued that disclosing availability would help cheaters using bots.

Other transparency measures stayed in the bill, such as requiring all-in pricing to be displayed instead of fees added after checkout. As well, the face value of the ticket must be shown, and the currency and seat location must be disclosed.

Bot ban widely applauded

The one big measure all parties are applauding is the bot ban.

"Who in their right mind would say that that's a bad idea?" said Patti-Anne Tarlton, chief operating officer for Ticketmaster Canada, in an interview. "The only challenge that they would be faced with is the enforcement thereof."

Tarlton said the new private right of action provided by the legislation will help with enforcement. It will allow individuals and companies to sue anyone found to be flouting the law. Others raised concerns about the legal recourse, saying it could be anti-competitive measure and clog up the courts.

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"On balance, it's a very productive piece of legislation," said Tarlton. She'd still like the government to give some ground on the price cap. Ticketmaster also operates a resale platform for ticket sellers.

StubHub's Poirier said the government didn't strike the right balance among the competing interests in a complex and valuable industry.

"The fans and the Ontario businesses that were supposed to be put at the front of this and made the most important constituents here were ultimately relegated to second place," he said. "And that's just unfortunate."

Naqvi acknowledged there is "no one magic bullet here," but said he feels confident the new rules will benefit consumers. 

"I think Ontario is showing leadership by bringing a suite of measures that will create a level playing field for the fans," he said.