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Report On Business Competition Bureau joins fight for fairer ticket pricing practices

The Ontario government is proposing new legislation aimed at cracking down on ticket scalping.

Donald Weber/The Globe and Mail

The Competition Bureau has entered Canada's fight for fair ticketing practices, asking both original vendors and resale marketplaces to reveal that total value of event-ticket prices up front, rather than marketing "misleading" prices that avoid including service fees.

In a statement this week, the bureau shunned the practice of "drip pricing" – enticing consumers with low advertised prices for products whose final costs are much higher because of mandatory but unadvertised fees. In the past 14 months, the independent law enforcement agency has handed more than $4-million in penalties to car-rental companies for similar practices.

By extending this warning to the live-entertainment industry, the Competition Bureau becomes the latest Canadian institution intent on reshaping the ticket market in favour of consumers and making life easier for music, sports, theatre and other live-event fans.

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In June, Ontario revealed sweeping legislation that would make scalpers' rapid ticket-buying "bot" software illegal and cap markups on ticket resales to 50 per cent of their face value. To be tabled this fall, the new Ticket Sales Act would be the first of its kind in Canada to try to balance the public appetite for legitimate resales with harsh penalties for persons or companies that skew the marketplace.

Ontario's new rules would also force vendors and resellers to reveal total ticket prices upfront with fees included – which is exactly what the Competition Bureau would like to see happen across the country.

The bureau declined to comment whether any one specific company or complaint drove it to make the announcement this week, or if action against any specific vendor was forthcoming. Deputy commissioner Josephine A.L. Palumbo said in an interview that it was an invitation for consumers to submit complaints and a suggestion that companies make themselves aware the Competition Act's guidelines for behaviour in a competitive marketplace.

"While I can't discuss any ongoing matters that may be before the bureau at this time, we want to assure that the bureau will not hesitate to take action to address misleading advertising and deceptive marketing," she said.

Representatives for Ticketmaster, the global ticket-vending leader, and the widely popular resale marketplace Stubhub both said spokespersons were not available for interviews.

In an e-mailed statement, Stubhub said it "provides fans a clear understanding of the currency, fees and taxes associated with every transaction prior to purchase. ... We continue to advocate for open, transparent marketplaces that connect fans with the event experiences they love, with clear information for their purchase decision."

Pascal Courty, a University of Victoria economics professor who studies the event-ticket industry, says that while most consumers are aware that final prices are rarely as low as advertised, the practice itself can reduce competition by driving down consumers' likelihood to seek out other options.

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With so much discussion around ticket fairness – from last year's widely scalped Tragically Hip tour to Ontario's proposed new ticketing laws to similar legislation being debated the world over – he said it makes sense pricing would become top-of-mind to the Competition Bureau.

"The opacity introduced by drip pricing is a concern for competition authorities around the world," said Dr. Courty, who noted that it despite the Bureau's national jurisdiction, the move might not pressure other provinces to follow Ontario's suit with legislation.

Extra ticket fees range widely depending on the performer or team, promoter, vendor and venue. The Competition Bureau did not name any specific ticket-pricing examples it considered egregious, but said that in other industries it had examined, unadvertised fees increased consumers' final prices by as much as 57 per cent.

It is not hard, however, to determine the extent to which fees expand prices. The cheapest 500-level ticket for this this Friday's Blue Jays home game against the American League-leading Houston Astros, for instance, is advertised as $23 on Ticketmaster. But as the purchase process goes on, a $5.50 "service fee" and $4 "order processing fee" are tacked on. The $32.50 final price is 41 per cent above the price initially shown.

The same issue happens on resale markets. For a consumer who has not adjusted Stubhub's settings, to get tickets to see pop star Katy Perry at Montreal's Bell Centre on Sept. 9, a ticket listed for $53.99 comes to $68.21 total – a 26-per-cent difference. There is a further hitch: Stubhub's Canadian users see listings in U.S. dollars. And while the reselling marketplace is transparent about always listing prices with the greenback, that sends the total value to about $88 in Canadian dollars under today's less-than-favourable exchange rate.

Jurisdictions around the world have long grappled with how to handle extra ticket fees. New York's attorney-general has called their price-raising possibilities "outlandish" and suggested that any fees other than for special services such as delivery violate state law. A landmark U.K. report on ticketing, meanwhile, recommended the government convene an industry group to review drip-pricing.

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