The Big, Big Scalping Fiasco

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This document was created for the purpose of assessment for Diploma of Events Management at Southbank Institute of Technology in 2008.

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  • Now in layman’s terms, this section means that a business cannot do anything or claim they will do something that misleads their clients, customers or anyone else that something is right which isn’t. What people call “false advertising” is an example of this. If we go back to the ticket clause…
  • … we can see that it seems pretty straight forward. But this was not true according to eBay. eBay basically wanted the BDO promoters to prove that the terms of that statement were true. They wanted to hear that the tickets could and would be claimed “voidable” and therefore useless and that holders of these tickets could not and would not be allowed into the festivals. They wanted to know these terms were not merely implied, but true.
  • Evidence including that given by CFE senior executives that they “can’t trace every ticket” assisted eBay’s case that CFE could not possibly detect and therefore cancel every scalped ticket as implied. CFE claimed the consideration was that the ticket holder would agree to the terms and conditions on the ticket in return for entrance to the event. The ticket holder may not have come into direct contact with CFE (that is, they bought it from another source such as Ticketek.com) but still agree to the terms and conditions.
  • Negative press for both; that eBay appeared to consumers as a greedy, money-grabbing corporation with no thought to the ethical implications of scalping, and that CFE were perhaps incompetent in defending themselves and fighting scalpers. CFE was forced to pay eBay International’s legal costs for the case. 2007 Big Day Out attendance numbers were not affected, having jumped around 50,000 people from 2006. Amendments to the Queensland Major Sports Facilities Act 2001 came in on December 7 th , two weeks or more before the Big Day Out case came to the courts, which made ticket scalping in Queensland illegal. Fines of up to and over $1000 can apply to scalpers and $300 plus to people purchasing tickets selling for over ten per cent their face value. However this could not have had any affect on the federal court case as the amendments only took place in Queensland law, not federal.
  • The Big, Big Scalping Fiasco

    1. 1. The Big, Big Scalping Fiasco eBay International AG  v Creative Festival Entertainment Pty  Limited
    2. 2. The Case 18th December 2006, eBay took Big Day Out promoters Creative Festival Entertainment to the Federal Court eBay claimed CFE were in breach of the Trade Practices Act 1974 (Cth)
    3. 3. The Clause‘Should this ticket be re-sold for profit it will be cancelled and the holder will be refused entry. This condition specifically prohibits ticket re-sale through online market or auction sites.’ (AustLII, 2008)
    4. 4. The Clause (a) scalped tickets would be cancelled; (b) holders of these tickets would be refused entry; (c) CFE was able to detect and cancel every scalped ticket possible (d) CFE was able to refuse entry to these ticket holders; (e) CFE was entitled to enforce the provisions of ‘clause 6’ of the ticket conditions in all cases;
    5. 5. Trade Practices Act 1974 (Cth) S 51A(1)“…where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.” S 52(1)“A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” (AustLII, 2008)
    6. 6. The Clause‘Should this ticket be re-sold for profit it will be cancelled and the holder will be refused entry. This condition specifically prohibits ticket re-sale through online market or auction sites.’ (AustLII, 2008)
    7. 7. The Case eBay claimed:  CFE did not have right to cancel tickets, nor power to detect scalped tickets as claimed on tickets.  no consideration due to ‘unlimited power’ of CFE.  no contract until ticket holder at the gate hence limited power to detect, cancel and make void scalped tickets. CFE claimed:  consideration between ticket holder and CFE was the terms and conditions on the ticket.  eBay encourages scalping of tickets for profit
    8. 8. The Result CFE was found to be wrongfully implying that:  they were able to detect and cancel every scalped ticket possible  they were able to refuse entry to these ticket holders, and  they were able to enforce the conditions in all cases Most tickets sold on eBay are scalped
    9. 9. Consequences Negative press for both companies. CFE incurred eBay’s and their own legal fees. BDO 2007 attendance rates unaffected. Likely “tighter restrictions on the way tickets are sold in the future.” (ABC, 2006) Increased research into selling methods
    10. 10. Consequences eBay-sold tickets remain legal despite some state legislation banning scalping. Legal loophole – Internet seen as above the law through unenforceable clauses and lack of legislation
    11. 11. Prevention Measures Identification of ticket holder to go onto ticket, i.e. names, fingerprints. Tougher limits to ticket purchases per person. Such clauses should not be present unless legal authority has been fully asserted. Federal anti-scalping legislation.
    12. 12. Final Word “This ticket may not, without the prior consent of the promoter, be resold or offered for resale at a premium over the face value of the ticket (including via on-line auction sites) … If a ticket is sold or used in breach of this condition, the promoter reserves the right to cancel the ticket without a refund… [and] refuse a ticket holder admission to the event or to evict that person from the event.” (Studioexit, 2007)

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