Court hears 90% of tickets sold by Viagogo from profit-seeking scalpers

About 90% of event tickets sold to the public through Viagogo were being sold by “scalpers”, the High Court in Auckland has been told.

The Commerce Commission is seeking a declaration that Viagogo misled consumers by claiming to be an “official” seller of “guaranteed” tickets to events including concerts and sports matches.

The commission also wants the court to make an order requiring Viagogo to clearly and prominently inform ticket buyers that it is not an official ticket seller, but provides a marketplace on which tickets to events are resold.

“Viagogo admits that over 90% of tickets that are sold in New Zealand are from scalpers; people selling tickets in commercial quantities,” said Andy Luck, in opening statements for the commission.

READ MORE:
* Viagogo accepts jurisdiction of NZ courts, changes website
* Commerce Commission wins right to fight for interim injunction against Viagogo
* Fight to impose injunction on Viagogo back in court

Viagogo’s core business was not to let ordinary people sell tickets for events they no longer wished to go to, Luck said.

“It’s a website for ticket scalpers to sell to the general public,” Luck said.

Sometimes scalpers used automated “bots” to buy tickets for events that they only ever intended to sell to the public through Viagogo for prices “far above face value”, Luck said.

Between July 18, 2016 and October 31, 2022, it resold just over 323,000 event tickets in New Zealand, Luck said.

The court heard that the commission had received 1300 complaints or communications about Viagogo.

Viagogo denies it misled consumers, and didn’t use the word “official” in relation to any event.

Aaron Lloyd, representing Viagogo, said the company provided a platform for people with events tickets to sell them to people who wanted to buy them.

Millions of people around the world used Viagogo, and its business model was well-known, Lloyd said.

“Viagogo tells the world it’s a secondary market, and the world knows it,” Lloyd said.

Luck told the court that Viagogo used Google Adwords to catch the eye of people searching for tickets for events.

Rarely did Viagogo check that people selling tickets on its website even had tickets to sell, Luck said.

Evidence would show people offering tickets to events through Viagogo before tickets for those events had gone on sale through official ticket vendors.

The commission would also show children’s tickets being resold as adult tickets, he said.

There was a significant risk that “tickets” sold on Viagogo’s website were not valid, Luck said. Consumers who bought invalid tickets on Viagogo would only learn they were invalid when they were denied entry to an event.

“That’s known in Viagogo as Refused At Gate, or RAG,” Luck said. “That risk is not fairly represented to buyers.”

Lloyd said Viagogo’s “guarantee” had value, and had been accurately described to ticket buyers.

It guaranteed ticket buyers would get valid tickets in time to go to their events, and if they did not, they would get their money back.

It was absurd for the commission to suggest that any guarantee was an “absolute utter assurance and promise”, Lloyd said.

He said there was an issue with “misplaced anger” about scalpers associated with the case, but anger about scalpers should not be directed at Viagogo, Lloyd said.

The secondary ticket sales market existed because event tickets were often not refundable, Lloyd said.

People with tickets to events they no longer wanted had to sell them.

Lloyd said scalping was not illegal, except on tickets for a very small subset of events.

Parliament restricted scalping only for tickets to “major events” designated under the Major Events Management Act, he said.

The commission also alleges Viagogo had made misleading claims that tickets for events were scarce, when they were not. It claims Viagogo also only revealed the full price of tickets, including its fees, late in the sales process.

Lloyd said scarcity claims made by Viagogo were factual. The pricing claims were historic, he said.

After an earlier legal tussle ending in 2019, Viagogo had made changes to the representations it made on its website, and promised not to use the phrases “All tickets 100% guaranteed!” or “100% guaranteed” for Google Adwords advertising.

The commission also wanted the court to rule that Viagogo’s terms and conditions contained an unfair contract term, namely that consumers in New Zealand could only sue it through the Swiss courts.

But Lloyd said the clause recognised the realities of international commerce, and protected a legitimate business interest for Viagogo.

“Consumers don’t have to use the services Viagogo offers,” Lloyd said.

Viagogo is based in Switzerland, and managed out of the United States, Luck said.

Luck said the commission was not seeking a financial penalty.

The case is due to conclude in early March.