New York State Attorney General Letitia James speaks at a news conference to announce the filing of a federal lawsuit in partnership with at least 10 U.S. state attorneys general to stop a proposed $26 billion merger of mobile carriers Sprint and T-Mobile in New York, U.S., June 11, 2019. REUTERS/Mike Segar
July 11, 2019
By Jonathan Stempel
NEW YORK (Reuters) – Two companies in the ticket resale industry agreed to pay $1.55 million to settle a lawsuit by New York Attorney General Letitia James accusing them of tricking tens of thousands of people into buying tickets for concerts, shows and other live events that they never owned.
Ticket Galaxy, TicketNetwork Inc and their owner Donald Vaccaro did not admit liability in Wednesday’s settlement.
The accord came 3-1/2 years after former Attorney General Eric Schneiderman said his own multi-year probe into ticket sales had uncovered hoarding, favoritism and other practices that drove ticket prices far above face value.
Ticket Galaxy, which resells tickets, and TicketNetwork, which runs an online ticket resale marketplace, said they were pleased to settle, and that the accord provided “certainty” regarding their practices.
The case concerned “speculative tickets,” or offers by ticket resellers to sell tickets that they did not yet have in their inventory.
James said practices used by the South Windsor, Connecticut-based companies inflated prices for events where tickets had yet to be released, including several Bruce Springsteen concerts in late 2015 where tickets were fetching $2,100 to $3,600 — each.
She said that from January 2012 to April 2018, New York consumers unknowingly placed more than 96,000 orders through speculative ticket programs, roughly one-third of which went through Ticket Galaxy.
The defendants countered that it was normal for companies to sell tickets they expected to eventually receive, a practice known as “drop shipping” and employed by such companies as Amazon.com Inc and eBay Inc.
TicketNetwork also said federal law immunized it from liability for the conduct of people who use its services.
Wednesday’s settlement also required Ticket Galaxy and TicketNetwork to improve disclosures to consumers.
“We are holding these companies accountable for their deceptive practices that swindled New Yorkers out of their hard-earned money and are putting in place reforms to protect ticket buyers in the future,” James said in a statement.
James’ immediate predecessor, Barbara Underwood, had sued Ticket Galaxy and TicketNetwork last Sept. 14, eight days after the companies filed their own lawsuits to preempt the lawsuit.
(Reporting by Jonathan Stempel in New York; Editing by Susan Thomas)