Officials have raided the London fices StubHub and Viagogo as part an ongoing investigation into the secondary ticketing sector and suspected breaches U.K. consumer law.
The raids are believed to have taken place earlier this year when eBay-owned StubHub and Switzerland-registered Viagogo refused to hand over documents about how they operate to British government agency the Competitions and Market Authority (CMA).
Information notices were also served to Ticketmaster-owned Get Me In! and Seatwave — the two other big players in the U.K. secondary market — who are understood to have complied with the request.
The Guardian reports that one area investigators are specifically looking into is whether industrial scale touts receive special benefits from secondary ticketing services.
Citing sources close to the inquiry, the newspaper says that during the raids, CMA ficials seized data from StubHub relating to its “top seller” program, which provides discounts on seller fees and an exclusive password-protected portal enabling large-scale transactions to its leading touts.
Those discounts are understood to include special rates for vendors who hit sales over $250,000, with StubHub’s 10 percent base fee falling to 7 percent for sellers moving more than $5 million in tickets per year.
In a statement, a StubHub spokesperson said, “We understand the CMA investigation is ongoing and therefore await the outcome this.” Viagogo did not respond to requests to comment when contacted by Billboard. The CMA declined to comment.
“These reported actions by the CMA are a welcome development,” said a spokesperson for the FanFair Alliance, who called for “root-and-branch reform” the secondary ticketing market.
“Contrary to their slick marketing campaigns, these secondary] platforms are dominated by pressional touts who are seemingly fered incentives to sell ever-higher volumes tickets,” said FanFair Alliance.
One scalper who is reported to have benefitted from StubHub’s “top seller” program is Canadian citizen Julien Lavallée, whose business practices have today (Nov. 10) been exposed in the Paradise Papers leak financial documents.
According to research carried out by CBC News in Canada, Lavallée’s Quebec-based scalping operation acquired 310 tickets for Adele’s 2016 U.K. tour (worth over $50,000 face value) within 25 minutes them going on sale, using 15 names and 12 addresses in three countries — despite a four-ticket-per-customer limit being in place.
Although Lavallée has previously said that he doesn’t use bots to acquire tickets, CBC News passed its findings onto an event security expert who concluded that was not “feasible” without the use bot stware, which — following the U.S.'s lead — is currently in the process being outlawed in the U.K.
The Guardian reports that Lavallee's recently-dissolved I Want Ticket Inc. business also scooped up hundreds tickets for British concerts by Ed Sheeran, Drake, Metallica and Jamiroquai worth more than £55,000 ($72,000), each time purporting to be a buyer living at a U.K. address.
There are now calls for a criminal investigation into Lavallée’s operations, as well as the wider relationship between ticket resale companies and touts.
In a statement provided to CBC News, a lawyer for Lavallée denied any wrongdoing and said his client “carries out all its activities in accordance with the laws and rules the jurisdictions in which it operates and sells.”
StubHub has also issued a statement in response to the Paradise Papers revelations, saying that it “holds all sellers to a very high standard and requires they follow all relevant laws.”
“StubHub agrees that the use bots to procure tickets is unfair and anti-consumer,” the statement continues, adding that the company “has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets.”