By Peter Reap, J.D., LL.M. and E. Darius Sturmer, J.D.
The resellers will face partially suspended judgments of more than $31 million in civil penalties.
The FTC has filed the first three suits under the Better Online Ticket Sales (BOTS) Act, against New York-based ticket brokers who allegedly used automated software to illegally buy up tens of thousands of tickets for popular concerts and sporting events, then subsequently made millions of dollars reselling the tickets to fans at higher prices, the agency announced today. Furthermore, in stipulated proposed orders with the three groups of defendants, they will be subject to judgments totaling more than $31 million in civil penalties for their violations of the Act. Due to their inability to pay, the judgments will be partially suspended, requiring them to pay $3.7 million (U.S. v. Concert Specials, Inc., FTC File No. 1923196, Case No. Civil Action No. 21-CV-214; U.S. v. Cartisim Corporation, FTC File No. 1923195, Civil Action No. 21-CV-212; U.S. v. Just in Time Tickets, Inc., FTC File No. 1823115, Civil Action No. 21-CV-215).
Created in 2016, the BOTS Act gives the FTC authority to take law enforcement action against individuals and companies that use bots or other means to circumvent limits on online ticket purchases. "These ticket brokers used bots and other technical tricks to scoop up thousands of tickets to popular events as soon as they went on sale," said FTC Bureau of Consumer Protection Director Andrew M. Smith. "Not only does this deprive loyal fans of the chance to see their favorite performers and shows, it is against the law."
Allegations. The three complaints filed in the federal district court for the Eastern District of New York against Cartisim Corp. and Simon Ebrani; Just In Time Tickets, Inc. and Evan Kohanian; and Concert Specials, Inc. and Steven Ebrani; allege the defendants purchased more than 150,000 tickets for popular events. They did so by violating the BOTS Act in a number of ways: using automated ticket-buying software to search for and reserve tickets automatically; concealing their IP addresses with software; and creating hundreds of fictitious Ticketmaster accounts and credit cards to get around posted event ticket limits. They then reaped millions of dollars in revenues from the resale of the tickets they purchased using these unlawful means, the complaints detail.
For example, the complaint against Concert Specials and its owner/president contends that since January 2017 they have been using ticket bots, hundreds of fictitious Ticketmaster accounts, multiple credit cards—some in the names of non-existent individuals—and proxy or spoofed IP addresses to bypass, trick, or otherwise avoid security measures and other access control measures on Ticketmaster’s websites. This enabled them to obtain a volume of tickets well beyond Ticketmaster’s posted ticket limits, the government contends.
Concert Specials and its owner/president then resold or attempted to resell the tickets on secondary ticketing websites, "often at a significant price markup," prejudicing consumers who otherwise might have been able to buy those tickets directly from Ticketmaster at a lower price, the complaint continues. Since 2017, these defendants raked in more than $13.7 million in revenue selling the tickets they obtained from Ticketmaster. Moreover, Concert Specials and its principal signed an Assurance of Discontinuance with the New York Attorney General in July 2016, under which they had agreed not to use automated ticket purchasing software (including bots) in order to bypass security measures to purchase tickets to events in the state, the complaint notes.
Proposed orders. The proposed orders call for judgments and civil penalties to be entered against the defendants for the following civil penalties:
- $16 million against Concert Specials, Inc. and Steven Ebrani, which is partially suspended due to an inability to pay. They will pay $1,565,527.41.
- $11.2 million against Just In Time Tickets, Inc. and Evan Kohanian, which is partially suspended due to an inability to pay. They will pay $1,642,658.96.
- $4.4 million against Cartisim Corp. and Simon Ebrani, which is partially suspended due to an inability to pay. They will pay $499,147.12.
Under the terms of the proposed orders, if the defendants are found to have misrepresented their financial condition, the full amounts of the penalties will become immediately due. The proposed orders also prohibit the defendants from further violations of the BOTS Act, including using methods to evade ticket limits, using false identities to purchase tickets, or using any bots to facilitate ticket purchases.
Acting chair’s statement. Acting FTC Chairwoman Rebecca Kelly Slaughter said she was "thrilled that the Commission’s staff thoroughly investigated and uncovered the violations of the BOTS Act alleged in these complaints against ticket resellers" in her concurring statement to the FTC’s 5-0 vote authorizing the staff to refer the complaints to the Department of Justice and to approve the proposed consent decrees. She strongly voiced her support for these first actions brought under the BOTS Act and "hope[d] that they are the first of many." She noted that the civil penalty amounts in these settlements are much higher than the defendants’ revenues and would force future bad actors "to consider the risk that, if they get caught, they will not only have to disgorge the profits they made from cheating but also pay a penalty that may be many multiples thereof."
Attorneys: Benjamin A. Cornfeld and Bonni Jessica Perlin, U.S. Department of Justice, for the U.S. Leonard L. Gordon (Venable LLP) for Cartisim Corp., Concert Specials, Inc., and Just In Time Tickets, Inc.
Companies: Cartisim Corporation; Just in Time Tickets, Inc.; Concert Specials, Inc.
MainStory: TopStory ConsumerProtection FederalTradeCommissionNews
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