Lower House Adopts Bill Limiting Resale of Concert Tickets
On 6 April 2010 the Dutch Lower House of Parliament adopted a
bill curbing the resale of tickets to concerts and sports events,
among other things, against extortionate prices. The bill,
submitted by MPs Arda Gerkens (SP) and Nicolien Van Vroonhoven-Kok
(CDA), does not prohibit the resale of tickets in general, but does
intend to protect consumers against the extortionate prices that
are usually asked.
Reason Behind the Bill
The submitters of the bill discovered that many middlemen are
active in the large-scale resale of tickets to concerts, festivals
and sports events. This reselling is mainly done online at prices
many times above the original sales price. According to Gerkens and
Van Vroonhoven, the middlemen purchase so many tickets that it is
hard for the public to get tickets through the regular sales
channels. Consumers who wish to go to certain events will therefore
have to reach deeper into their pockets and buy a ticket from a
middleman. Furthermore, it is not always clear to a consumer
whether he is buying the ticket from a middleman or through the
official sales channel.
Apart from the alleged prejudicing of the consumer, the
submitters of the bill also argue that large-scale resale also
prejudices the organizers of events and the artists. Organizers are
said to get a distorted picture of the real interest in an event,
because middlemen are buying tickets on a large scale. The
deployment of staff during an event is geared to these sales, for
example. For artists this may mean that they are counting on a
fully booked concert hall, while in practice this is not always
true, if the middlemen have purchased many tickets but have not
been able to sell them.
Maximum Price For Consumer
Purchase
The bill adds one section to Book 7 of the Dutch Civil Code
("BW), the book in which (consumer) purchase is regulated,
among other things. In the proposed section it is provided that a
professional middleman who sells a ticket may not use a higher
price than the original sales price mentioned on the ticket. The
bill therefore focuses on consumer sale, where the selling party is
acting 'in the performance of a profession or business'.
Resale by private persons is thus beyond the scope of this bill.
The provisions proposed in the bill are provisions of mandatory law
for consumers.
Incidentally, the middleman may apply a price raise to the
extent that it is connected with the direct costs of administration
and dispatch services, as long as these costs are not
'manifestly unreasonable'. A price raise of 20% is regarded
as manifestly unreasonable in any case in the bill, but the
proposal leaves room to regard lower raises as manifestly
unreasonable too.
If a consumer buys a ticket from a middleman who has applied a
manifestly unreasonable price raise, the amount the consumer has
paid on top of the original sales price is paid 'without being
due' as envisaged in Section 203 of Book 6 of the BW. An undue
payment means that there is no legal ground for the payment, and
therefore this payment can be claimed back. The bill thus offers
the consumer the option of claiming the excess payment from the
middleman from whom he bought his ticket. Before the event has
taken place, the consumer may, pursuant to the bill, also annul a
purchase agreement that was concluded in violation of the proposed
section of the law. If an agreement is annulled, it is as if it has
never existed; in that case too the consumer has unduly paid the
purchase price and may claim it back.
Enforcement and
Self-Regulation
If the reclaiming of the excess payment pursuant to undue
payment does not lead to repayment by the middleman, the consumer
may apply to the civil court. Besides, the trade association for
secondary ticket sale EUSTA (EU Secondary Ticketing Association) is
working on a code of conduct and on the establishment of a disputes
committee under the wings of the Dutch Foundation for Consumer
Complaints Boards.
An earlier version of the bill was also aimed at amending the
Consumer Protection Enforcement Act, in which a role was reserved
for the Consumer Authority. Following criticism during the
discussion of the bill in the Lower House of Parliament, this part
of the bill was abandoned, especially since EUSTA has now also
brought forward a serious offer for self-regulation. Should
self-regulation not lead to the desired effect, the bill does offer
the option of setting further rules by order in council.
What Next?
Meanwhile, the bill has been adopted by the Lower House of
Parliament. The next step is the discussion in the Senate. The
submitters of the bill hope that this discussion will still take
place before the parliamentary elections.
Should the bill also survive the Senate, it still remains to be
seen whether the act will have the intended effect. For example,
consumers may perhaps not take the trouble of taking their claims
to court. This takes time and money, while the amounts involved
will often be relatively low. However, there may be a role for
interest groups here, which could go to court on behalf of victims
in so-called class actions. The effectiveness of the act is
intended to be evaluated three years after its entry into
force.