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StubHub, Viagogo UK Offices Raided By Authorities

Friday, November 10, 2017   (0 Comments)

By: Gideon Gottfried | Pollstar

The UK Competition and Markets Authority raided the London offices of StubHub and Viagogo earlier this year, after both companies refused to submit information about their respective businesses. 

The CMA launched an investigation into the UK’s secondary ticketing market in summer 2016. As part of the investigation, it requested specific information from StubHub, which entered into a partnership with AEG in 2012, Viagogo as well as Live Nation’s resale platforms Get Me In! And Seatwave.

According to a Guardian report,Get Me In! and Seatwave complied with the request while the StubHub and Viagogo refused to. Which is why the CMA took the information by force, raiding StubHub’s office on Tottenham Court Road as well as Viagogo’s on Cannon Street back in August.

According to the report, the CMA is not only interested in establishing whether both company’s practices comply with UK law, but also in their respective incentives that encourage large-scale commercial resellers to charge mark-ups on tickets.

A StubHub spokesperson provided the following statement to Pollstar: “We understand the CMA investigation is ongoing and therefore await the outcome of this.”

Pollstar also reached out to Viagogo for comment. 

StubHub also takes center stage in revelations made by the recent leak of the so-called Paradise Papers, which expose the tax-avoidance schemes of individuals and companies. The papers reveal the business practices of Canadian big-time scalper Julien Lavallée, who claims in his resume to be working in partnership with StubHub.

In the resumé, which was obtained by CBC News and the Toronto Star in a joint investigation, Lavellée describes himself as ticket broker. With the help of the Paradise Papers, both news outlets were able to determine that Lavellée made $7.9 million in gross sales in 2014 alone.

The investigation looked into StubHub’s range of incentives for high-volume resellers and discovered “a password-protected portal exclusively for StubHub’s top sellers who prove they can move more than $50,000 worth of tickets a year.”

CBC News also obtained records from three UK events, showing that “despite a four-ticket-per-customer limit, [Lavallée’s] business snatched up 310 seats in 25 minutes, charged to 15 different names in 12 different locations.”

The records obtained by CBC not just show Lavallée’s name, but also the names of his wife, his father and “other friends and family.”

Reg Walker, a UK event security specialist questioned by the news outlet, said he has “spotted Lavallée targeting tickets for many U.K. concerts and suspects the Canadian is using multiple identities and aggressive software, known as bots, to trick the system.”

The fight against secondary ticketing in the UK picked up speed in summer 2016, when economics professor Michael Waterson published a report on the practice. This would serve the government as foundation for its subsequent hearings on secondary ticketing, to which it invited industry professionals from all sectors.

Promoters, agents, ticket operators attended those meetings and informed the UK government’s Culture, Media and Sport Committee about the ins and outs of secondary ticketing. Viagogo notably didn’t show up for any of them, despite being invited.

The committee’s inquiries into the topic ended abruptly, when Prime Minister Theresa May called for a snap general election earlier this year. Back then, committee chair Damian Collins had said: “Although we are unable to complete these important inquiries, there is no bar to our successors in the next Parliament taking up the evidence received – which has been published on the Committee's website – and finishing them. Given the importance of all these subjects, we hope that the new Committee will do so.”

While no new hearings on the matter have been conducted in Parliament since, the CMA is till investigating the secondary ticketing sector, as the news of the raid revealed.

Meanwhile, the UK’s FanFair Alliance continues to highlight the effect of secondary ticketing. A recent study showed how secondary ticketing sites make sure they end up on top of Google search results. 

Investigated tours included Metallica, Cliff Richard, Lulu and Run The Jewels. Viagogo alone topped search results 65 out of 100 times. One reason the company features so prominently, according to FanFair, is that secondary platforms charge high service fees that allow them to buy premium placement with Google.

 


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