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Is it a Crime to Use Scalper Bots?

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  • As for December 14,  2017, scalper bots became a provincial criminal offence in Ontario.
  • A bill to protect ticket buyers was passed on December 14, 2017.
  • Those against the legislation warn that some features of the legislation may actually disadvantage ticket buyers.
  • The Ticket Sales Act is contained in new consumer protection legislation.
  • Under the new legislation, scalper bots are banned.
  • Scalper bots buy a large number of tickets online for an event and then resell them at a large profit.
  • The ban is largely welcome by large ticket sellers and event hosts as ticket bots had become an out of control practice, driving the cost of tickets unreasonably.
  • Law enforcement  acknowledges that enforcement may be difficult when it comes to bots that often operate from outside Canada. Instead the law aims to undercut both profit incentive and resale abilities.
  • One of the  ways the new law achieves this is by  taking away the financial incentive, by putting a 50 per cent cap on resale prices in the resale market.
  • The law bans tickets from being resold at more than 50 per cent above the face value and makes it illegal to knowingly resell tickets that were purchased by bots.
  • Ticket sellers will also have to display an itemized list of all fees, taxes and service charges, and resellers would have to disclose the face value of the ticket.
  • Ticket resale sites say they welcome the scalper bot ban but warn that artificially controlling a global market may  lead to unintended consequences, as resales may be driven off of secure channels and into places where consumers are exposed to counterfeit and fraud, with zero protections.
  • The legislation originally required ticket sellers to disclose both an event’s maximum capacity and the number of tickets going on sale, which would have shown customers how many tickets may have been held back.
  • The new legislation was changed  to now only require sellers to disclose the maximum event capacity and the distribution method of the tickets.

The Ticket Sales Act:

TICKET SALES AND SOFTWARE

Ticket Sales
Ticket sale on secondary market above face value
2 (1) Every person who makes a ticket available for sale on the secondary market or who facilitates the sale of a ticket on the secondary market for a total amount, including any applicable fees or service charges but excluding any applicable taxes, that exceeds the ticket’s face value shall provide one of the following guarantees or confirmations to the ticket purchaser.
1. A guarantee issued by a secondary seller or operator of a secondary ticketing platform of a full refund for the ticket purchaser if,
i. the event that the ticket provides admission to is cancelled before the ticket can be used,
ii. the ticket does not grant the ticket purchaser admission to the event for which it was issued, unless this failure is due to an action taken by the primary seller or venue after the ticket is sold,
iii. the ticket is counterfeit, or
iv. the ticket does not match its description as advertised or as represented to the ticket purchaser.
2. A confirmation from the primary seller that the ticket is valid, provided directly or indirectly through a service that offers to confirm for any person in Ontario, for free or for a single, standard fee, whether or not a ticket that was originally made available for sale by the primary seller is valid.
3. Any other prescribed guarantee or confirmation.
Maximum amount
(2) Despite subsection (1), no person shall make a ticket available for sale on the secondary market or facilitate the sale of a ticket on the secondary market for an amount, including any applicable fees or service charges but excluding any applicable taxes, that exceeds the ticket’s face value by more than 50 per cent of the ticket’s face value.
Meaning of secondary market
(3) For the purposes of this section, a ticket sale on the secondary market refers to the sale of a ticket that was originally made available for sale by a primary seller.
Exception
(4) This section does not apply if the ticket sale is for the benefit of a registered charity as defined in subsection 248 (1) of the Income Tax Act (Canada).
Prohibition, ticket not in possession or control
3 No person shall make a ticket available for sale if the ticket is not in the person’s possession or control.
Use and Sale of Certain Software
Prohibition, use or sale of certain software
4 (1) No person shall use or sell software, including automated ticket purchasing software, intended to circumvent any of the following on a website, online service or electronic application of a ticket business:
1. A security measure that is used to ensure an equitable ticket buying process.
2. An access control system that is used to ensure an equitable ticket buying process.
3. Any other control or measure that is used to ensure an equitable ticket buying process.
4. A prescribed control, measure or system.
Exception
(2) Subsection (1) does not apply to the use or sale of software that is intended,
(a) to investigate a contravention of this or any other Act or law;
(b) to engage in research to identify and analyse flaws and vulnerabilities of measures, systems, or controls referred to in subsection (1) for the purpose of advancing the state of knowledge in the field of computer system security or assisting in the development of a computer security product; or
(c) for a prescribed research or educational purpose.
Prohibition, sale of tickets acquired using certain software
(3) No person shall knowingly make a ticket available for sale or facilitate the sale of a ticket that was obtained through the use of software described in subsection (1).
PART III
TICKET BUSINESS TRANSPARENCY
Disclosure
Disclosure before sale
5 (1) Before making any tickets to an event available for sale, a primary seller shall publicly disclose, on its website or otherwise, the following information:
1. The distribution method of all of the tickets to the event that will be made available for sale by the primary seller, including any sale that will occur before tickets are made available for sale to the general public.
2. The maximum capacity for the event.
Exception
(2) The disclosure referred to in subsection (1) is not required for the sale of season ticket subscriptions.
Disclosure of face value and total price
6 (1) Every primary seller that makes a ticket available for sale shall ensure,
(a) that the offer discloses the total price of the ticket and includes a separately itemized list of any applicable fees, service charges and taxes; and
(b) that the face value of the ticket is printed on or is otherwise displayed on the ticket when it is issued to the ticket purchaser.
Secondary sale
(2) Every secondary seller that makes a ticket available for sale shall ensure that the offer,
(a) discloses the face value of the ticket and the total price of the ticket; and
(b) includes a separately itemized list of any applicable fees, service charges and taxes.
Secondary ticketing platform
(3) Every operator of a secondary ticketing platform that facilitates the sale of a ticket shall ensure that the offer,
(a) discloses the face value of the ticket and the total price of the ticket; and
(b) includes a separately itemized list of any applicable fees, service charges and taxes.
General ticket business disclosure requirements
7 (1) This section applies to any ticket business that makes a ticket available for sale or that facilitates the sale of a ticket.
Canadian currency to be used unless otherwise indicated
(2) The ticket business shall ensure that any dollar amounts in the offer are listed in Canadian currency unless the offer indicates in a clear, prominent and comprehensible manner that a different currency is used.
Location of seat or standing area to be disclosed
(3) The ticket business shall ensure that the location of the seat or standing area that the ticket entitles the ticket holder to occupy, if applicable, is disclosed in the offer.
Other prescribed information
(4) The ticket business shall ensure that any other prescribed information is disclosed in the offer.
Identity of secondary seller to be disclosed
8 (1) A secondary seller shall disclose his, her or its name, location and contact information when it makes a ticket available for sale.
Identity disclosure
(2) An operator of a secondary ticketing platform that facilitates the sale of a ticket by a secondary seller shall ensure that the secondary seller’s name, location and contact information is listed in the offer.

 

 

 

6 Feb 2018

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