NY Attorney General Tackles Ticketing Practices

Several news outlets are reporting that NY Attorney General Eric Schneiderman has begun an anti-trust investigation of the National Football League’s ticketing practices.  Though AG Schneiderman’s office has not yet confirmed the investigation, such an investigation would fit squarely within the AG’s continued interest in the ticketing industry in New York, as evidenced by his office’s release of the report “Obstructed View: What’s Blocking New Yorkers from Getting Tickets” just last month.  That report, the culmination of a three-year investigation into tickets to concerts, sports, and other events, blasted what it called a network of “insiders and brokers” working together to drive up prices and limit availability of tickets to the general public.  The report also explicitly raised anti-trust concerns, stating that “restraints of trade exist,” and noting “evidence of abuse of monopoly power.”

The focus of the NFL investigation appears to be the NFL Ticket Exchange, an online ticket resale marketplace.  According to the AG report, many NFL teams require or encourage ticket holders to use the marketplace for ticket resales.  Many teams also enforce “price floors” on the marketplace, which are usually at or close to the face value of the ticket.  This approach, the report said, implicated two concerns: (1) buyers may believe they are paying the price of the ticket as established by an open market, as opposed to one affected by a price floor; and (2) the price floors eliminate the possibility of purchasing tickets below face value in periods of low demand.  The report used the example of late-season tickets “to watch a team not destined for the playoffs,” that fans might be able to obtain for less than face value in the absence of a price floor.

The Antitrust Bureau of the NY AG’s office enforces both federal and state antitrust laws.  N.Y. Gen. Bus. Law § 340 is quite broad, prohibiting “establishing or maintaining” monopolies, as well as “restrain[in]g” “[c]ompetition or the free exercise of any activity in the conduct of any business, trade or commerce.”  The law also expressly authorizes the AG to investigate violations of the state anti-trust laws and bring actions to restrain or prevent such violations.  N.Y. Gen. Bus. Law §§ 342, 344.  Federal law empowers state AGs to bring suit under the federal antitrust statutes. 15 U.S.C. § 15c.

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