UK plans to cap ticket reselling mark-ups

Ticket resale in the UK above face value will be made illegal under the new proposals, with service fees by resale platforms also being subject to a price cap to prevent them finding workarounds. Under the plans, individuals would also be banned from reselling more tickets than they were entitled to buy, in a bid to address touting.

The new rules would be enforced via the UK’s consumer protection enforcement regime in Part 3 of the Digital Markets, Competition and Consumers Act 2024 (DMCC Act), although a timeline for the new rules to come into effect has yet to be confirmed.

The plans were announced by the culture secretary, Lisa Nandy, as part of the UK government’s response to a public consultation on the resale of live events tickets that concluded earlier this year and focused on the secondary ticketing market. The government also published in parallel its response to a separate call for evidence on pricing practices in the live events sector, focusing on the primary ticketing sector, which was conducted alongside the ticket reselling consultation.

The focus on the UK’s live events ticketing sector comes in the wake of the Oasis ticket row last year, which highlighted consumer protection concerns over pricing transparency including the suspected use of dynamic pricing. The Oasis ticketing case concerned Ticketmaster’s selling practices on the primary ticketing market. It was pursued under consumer protection rules that predate the DMCC Act and was resolved when the CMA accepted legally binding commitments given by Ticketmaster to improve its practices in line with consumer law.

Following completion of the two parallel public consultations, the government has concluded that, for primary ticket sellers, recently strengthened consumer protection rules under the DMCC Act – including pricing transparency provisions set out in section 230 of the Act – are sufficient to ensure prices are clear and further legislation is not needed.  However it concluded that additional legislation is needed to address the secondary ticketing concerns the consultation had identified.

The proposed new rules would use a combination of price caps, volume limits, and new obligations for platforms.  A cap would be introduced both on resale prices – based on the original price paid for the ticket inclusive of unavoidable fees – and on service fees chargeable by resale platforms, to ensure there is no mechanism by which profits from resale can be funnelled back to touts.  Volume limits would apply to support the anti-touting price cap, banning individuals from reselling more tickets than they could have purchased in the primary sale. Finally, new obligations would be imposed on ticket reselling platforms requiring them to enforce compliance with the price cap on their sites.

The proposed new rules would cover any ticket resale platform – including social media outlets and secondary ticketing services – with businesses that breach the rules facing financial penalties of up to 10% of global turnover, under the DMCC Act.

Tadeusz Gielas, a competition and consumer law expert at Pinsent Masons, said: “It’s interesting to see that some of the current proposals build on reforms to UK consumer law that were already contemplated when the DMCC Act was progressing through Parliament as a bill. However there was insufficient parliamentary time to adopt those provisions in the final legal text of the Act due to a UK general election being called in May 2024.”

The government has said that it would introduce new legislation to give effect to its proposed ticket reselling rules “when parliamentary time allows”. 

The government is understood to be gathering evidence to determine some elements of the new rules, such as what would be a suitable level for a service fees cap for secondary ticketing platforms. Certain narrow exemptions for the price cap are also contemplated. The government has also revealed that the new legislation would prohibit the bundling of resale tickets with other products or services to ensure such packages are not used by the reseller “to obscure the real price that they are charging for the ticket and thereby circumvent the price cap.”

Gielas said: “Once the new legislative text is available it will be possible to better understand the likely impact the changes will have on the secondary ticketing sector, and how consumer law enforcement powers under the DMCC Act are expected to be used to ensure compliance. Notably, the government has refrained from proposing a licensing regime for secondary ticketing platforms, which would have created a significant compliance burden for secondary ticketing firms.”

The UK government’s proposed legal reforms to cap ticket prices and service fees on the secondary ticketing market were announced days after the Competition and Markets Authority (CMA) launched separate consumer protection investigations under the DMCC Act into two major ticket reselling platforms over pricing practices.

The government claims the proposed new measures will stop touts from using bots to buy large numbers of tickets online before immediately relisting them at inflated prices.

“For too long, ticket touts have ripped off fans, using bots to snap up batches of tickets and resell them at sky-high prices,” said Nandy. “Our new proposals will shut down the touts’ racket and make world-class music, comedy, theatre and sport affordable for everyone.”

The government has emphasised the importance of UK’s live events sector, and has identified the creative industries as a key part of its industrial strategy unveiled earlier this year.