The government must ban dynamic pricing and banish scalpers if consumers are to pay fair prices for concerts, the head of Australia’s largest locally owned ticketing platform says.
Last month the Albanese government said it planned to change consumer laws to address the practice of inflating tickets while customers wait in online queues, known as dynamic pricing, after tickets for the US rock band Green Day’s Australian tour rose to up to $500.
While the details of the reforms are yet to be released, the Humanitix co-chief executive officer, Joshua Ross, said the government and ticketing companies could do more to prevent people and online sites from buying tickets for the sole purpose of reselling them at huge markups.
“They need to create examples of it with proper prosecution,” Ross said. “And if they can clean up the scalping world by making the disincentive strong enough, then it makes sense to ban dynamic pricing.”
Anti-scalping laws vary from state to state. For example, in New South Wales and South Australia, it is illegal to resell a ticket for more than 10% of the original price. In Victoria, this rule only applies to concerts the government deems “major events”.
Ross said these laws did nothing to limit fees for selling tickets on third-party reselling platforms from being “exorbitant”.
“That should be tightened up,” he said. “I’m waiting for Albanese’s call because I’m happy to chat about this.”
Many ticketing companies have been resistant to reforms that would outlaw dynamic pricing, although extreme ticket price increases have outraged concert goers, putting the issue on the public agenda.
In the UK the Competition and Markets Authority is examining whether Ticketmaster engaged in “unfair commercial practices” in selling tickets for the Oasis reunion concert.
Some people waited for hours in the online queue only to find the price had jumped by more than £200 by the time it came to pay.
Ticketmaster – owned by Live Nation – and its main competitor Ticketek, have defended dynamic pricing by saying demand-driven pricing mitigates the problem of ticket scalping.
Humanitix, which Ross founded with Adam McCurdie, donates all profits from booking fees to charity.
Ross said the ticketing giants could do more to prevent scalping by not releasing purchased tickets until an hour before a concert, or facilitating their resale for people who could no longer attend.
“The question is, do they make a lot of money from dynamic pricing? And if the answer is yes, do you think they’d ever say publicly that dynamic pricing should be banned?” he said.
“There’s so much to block scalping that’s not being done so that we shouldn’t need dynamic pricing, because fans should be getting a real chance at a real price and at a fair price.”
A spokesperson for Ticketek said Ross’s comments were “misinformed” as the company did “deploy a range of technologies” to limit scalping “including but not limited to, unlocking barcodes hours before concerts”.
“Pricing of tickets and the use of dynamic pricing is a decision made by the artist, management or rights holder with the promoter, and not by the ticketing agency,” they said.
“Once a customer has added a ticket or any other items to their basket, the base price of the ticket (excluding fees) will not change throughout the course of the transaction.”
A spokesperson for Ticketmaster said pricing tickets “closer to demand” helped artists fighting scalping and they did not change prices “during the purchase process”.
“When tickets are priced according to market demand, event organisers and artists – not scalpers – retain the value,” they said.
“Ticketmaster invests more than the rest of the industry combined in technology and innovation to protect fans from online scalpers.”
The proposed government reforms are part of a broader package of measures designed to increase consumer protections by addressing everything from so-called subscription traps to deceptive online selling tactics.
Australia’s consumer protections lag the US, UK and EU when it comes to banning unfair trade practices, according to consumer advocates.
The proposed changes to dynamic pricing target those companies that change prices during a transaction, as opposed to more acceptable practices such as lifting the price of short-stay accommodation during peak periods, which customers are aware of when they start the booking process.
The chief executive of the Consumer Policy Research Centre, Erin Turner, said dynamic pricing became a problem when businesses charged wildly different prices for factors outside the customer’s control.
“Dynamic pricing isn’t fair when prices change while you’re trying to purchase a ticket,” Turner said. “So you go in with one price, you get to the end of the process, and it’s suddenly much higher.
“We’ve heard of examples where someone will start with one price and they’re lucky enough to be allocated a ticket and suddenly it costs hundreds of dollars more than what they were expecting.
“That bait and switch is deeply unfair in a high-demand situation. If you’re going to charge someone a higher price because of demand, it needs to be crystal clear upfront.”
Problems with dynamic pricing extend outside the ticketing industry given companies now access large amounts of customer data that can be used to price items differently, according to what the business believes an individual consumer will pay.
Consumer advocates have raised concerns over how some shoppers are being forced to hand over personal data to access the best prices for healthy foods such as vegetables, creating an unfair market.
Turner says ticketing companies that defend dynamic pricing are acting like scalpers, because they both end up charging consumers excessive amounts.
“Anytime someone charges hundreds of extra dollars for a ticket is a problem, whether that’s the ticketing company or an informal scalper,” Turner said.
