15 May 2024

Touts will rejoice at Labour’s ticket resale price cap

By Bob Kupbens

Labour has announced plans to introduce a drastic change to the secondary ticketing market that will drive legitimate, safe, transparent (and already highly regulated) ticketing platforms out of business – and force customer transactions to the unregulated black market. The policy is ill-thought-through and will lead to predictable and preventable outcomes for customers, leaving them disappointed and potentially defrauded. It is also a clear attack on the free market principles that are the foundation of our democracy.

Labour’s price cap on all ticket resales – expected at 10% above face value – was, despite the industry’s best efforts, announced without consultation and is a policy which has already produced disastrous results in other markets.

Price caps have been considered before – but rejected for a reason. In 2021, the Competition and Markets Authority conducted an industry-wide consultation and concluded that a cap would not diminish the incentives to buy tickets for popular events and resell them for a profit, suggesting that a cap would only force transactions onto the black market. It is vital Labour does not turn against this sage advice from the market regulator.

Scarce commodities always attract high prices. Whether bidding to have dinner with a celebrity at an auction, buying a luxury handbag or seeking a prized ticket to Taylor Swift’s Eras Tour, it is the buyer that determines the value they deem worthy. Tickets to highly valued, sold-out events often come at a premium for exactly this reason: we’re willing to pay for the luxury.

The secondary ticketing market does not exist to serve inflated prices that ultimately do not sell, but was founded and continues to exist to make purchasing event tickets more accessible, more convenient and most importantly, safe from fraud. It remains the same today and millions of people turn to secondary ticketing marketplaces day in, day out. These marketplaces are already heavily regulated, and platforms such as StubHub International, of which I am the CEO, are in full compliance with the existing red tape – providing transparency across all listings, safe payment methods and ticket guarantees.

These protections are what matter most to consumers – but chiefly won’t be available on black market channels, which is where secondary tickets will end up if forced out of the regulated market by a misguided price cap. From our own research, 59% of UK consumers who have bought tickets from resale platforms last year rank ticket authenticity as one of the top three most important aspects of a purchase, and 41% rank safety of the financial transaction. It’s clear the existing regulation works – StubHub International received just five complaints out of a total 2.6m complaints on Citizens Advice last year and operates with a 4.3 Trustpilot rating.

But this latest proposed legislation will shut down such transparent marketplaces. We invest millions each year into customer support services to offer a seven-day-a-week customer service and a FanProtect™ guarantee that provides a replacement or 100% refund if anything goes wrong. Labour’s price cap would make it financially impossible to continue, forcing trusted marketplaces out of business.

Even today, with a robust secondary ticketing market in place, fans have lost £1m in fake ticket sales in relation to the Taylor Swift Eras tour alone (£6.7m overall in 2023), with Lloyds Bank recently reporting that 90% of reported cases of fraud started with fake adverts or posts on social media. This issue will only be exacerbated following the closure of safe, transparent resale platforms.

Already, we have seen the negative consequences of a price cap in countries which have implemented similar regulation. For example, in Victoria, Australia – where it is illegal to resell tickets at more than 10% of the original price for designated events – fans have already lost more than $260,000 to scammers when trying to purchase Taylor Swift tickets.

If Labour wants to tackle many of the issues it raises, it needs to consider primary ticket sellers who are currently lightly regulated and yet responsible for the number of professional touts and bots that sweep up tickets on the date of issue, preventing you and I from buying tickets at first issue. If the onus is shifted, secondary ticketing websites will be able to remain as they’re intended: for anyone looking to resell tickets to events they can no longer attend and to provide opportunities for fans to purchase tickets if they missed out on the first release.

Ultimately, the ill-considered nature of this decision to achieve a short-term political win sets a troubling precedent for other sectors and would constitute significant overreach if implemented. By ignoring the principal competition regulator in the UK, Labour has proposed anti-free market regulation that would be bad for consumers, bad for the economy and bad for the UK.

This article has been subsequently corrected.

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Bob Kupbens is the CEO of StubHub International.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.