The Associated Press
EAST RUTHERFORD, N.J. – Ticketmaster has agreed to change its online sales process after it directed people seeking Bruce Springsteen tickets to a subsidiary that charged up to 50 times the face value.
Ticketmaster reached a settlement with New Jersey, but the changes apply to all its sales nationwide, state Attorney General Anne Milgram said Monday.
The settlement comes as Ticketmaster Entertainment Inc. faces scrutiny for a proposed merger with the concert promotion giant Live Nation Inc. The merger will be the subject of congressional hearings Tuesday in Washington.
Sen. Charles Schumer, D-N.Y., has said he thinks the merger would violate antitrust rules by giving Ticketmaster a near-monopoly on the concert ticket market. Schumer said Monday that he welcomed the New Jersey settlement.
"While we are pleased Ticketmaster has acknowledged its mistake ... giving Ticketmaster near total control over the distribution of concert tickets here in New York and across the country is a recipe for disaster," he said.
In announcing the merger earlier this month, Ticketmaster Chairman Barry Diller sought to dispel the notion that the deal would lead to higher ticket prices. The companies say that a combined company could better withstand the recession, sell more tickets and improve service to fans.
The problems at the heart of New Jersey's settlement happened when tickets for Springsteen's May 21 and May 23 concerts at the Izod Center in East Rutherford, N.J. went on sale Feb. 2. Some ticket buyers were redirected from the main Ticketmaster site to TicketsNow, a subsidiary that allows people who have tickets to sell them at marked-up prices.
Milgram said at the time that redirecting them might have violated the state's consumer fraud act. Springsteen said on his website that he and the E Street Band were "furious" about what happened.
Ticketmaster blamed a software glitch. The company said the ``voluntary agreement" with the attorney general formalizes changes it had already implemented.
In the settlement, Ticketmaster did not admit wrongdoing but agreed to pay the state $350,000 (dollar figures U.S.), Milgram said. The company will also compensate ticket holders who complained and change how it handles secondary sales, she said.
Milgram says she plans to further investigate the resale market – largely dominated by ticket brokers who buy in bulk and resell at higher prices.
"What is critical is that consumers understand what is happening on any Internet site during a sale of tickets," Milgram said. "The (Ticketmaster) website suggested that consumers could continue their search on TicketsNow, making it seem there was no difference in the two markets when, in fact, of course there is."
Milgram said her office received about 2,200 complaints from people unable to buy Springsteen tickets for a face-value price of $65 or $95. They were instead directed to TicketsNow, where tickets retailed for $200 to $5,000 apiece.
Connecticut Attorney General Richard Blumenthal said he was studying Monday's settlement but would continue an independent investigation into Ticketmaster sales of Springsteen tickets in Connecticut.
Also, a Canadian man sued Ticketmaster earlier this month for redirecting him to TicketsNow when he went to buy tickets to a Smashing Pumpkins concert in November. The lawsuit, which is seeking class-action status, says the company is violating provincial anti-scalping laws by selling tickets above face value.