FTC fines $ 3.7million note brokers for skyrocketing settlement

Federal authorities submitted their first-ever case to 2016 anti-bot law to crack down on ticket scalpers. Three New York-based ticket brokers were ordered to pay $ 3.7 million in fines after allegedly making millions of dollars through robot-based ticket resale systems, Federal Trade Commission announced Friday.

The companies – Cartisim Corp., owned by Simon Ebrani; Just In Time tickets, owned by Evan Kohanian; and Concert Specials, owned by Steven Ebrani, are accused of having recovered more than 150,000 tickets from Ticketmaster to resell them at a higher price. In total, the three earned $ 26.1 million in estimated revenue, according to the complaints. The FTC claims it used automated ticket purchasing software, tools to hide their IP addresses, and an army of hundreds of fake accounts and credit cards, among other methods to bypass Ticketmaster’s purchase limits and protection designed to detect non-human visitors.

FTC regulators added that this was the agency’s first enforcement action brought under the Online Ticket Best Sellers Act (BOTS), an anti-bot law passed in 2016 banning ticket scalpers to use automated means to buy tickets in bulk and avoid purchase caps.

“These brokers have used bots and other technical tricks to grab thousands of tickets to popular events as soon as they go on sale,” said FTC Director of the Consumer Protection Bureau Andrew Smith in the ‘Friday announcement. “Not only does this deprive loyal fans of the chance to see their favorite artists and shows, it is illegal.”

The three note brokers were originally facing more than $ 31 million in civil penalties for violations of the BOTS Act as part of a proposed settlement with the FTC. But federal regulators have agreed to suspend the bulk of those fines due to companies’ inability to pay, as long as they meet certain conditions. In the future, defendants could be charged with the full amount if it is found that they have again violated the BOTS law, faked their financial documents to qualify for the suspended settlement amount, or failed to regularly provide authorities with up to date information. compliance records and reports. Once a judge approves these conditions, Concert Specials will pay approximately $ 1.56 million, Just in Time Tickets approximately $ 1.64 million, and Cartisim Corp just under $ 500,000 to the US Treasury.

So what events did these scalpers even pursue? The FTC’s complaints do not go into detail, except that their alleged targets included several sporting events and musical performances, including concerts by Elton John. So if you got a prize seeing “Rocket Man” live, I guess you now know who to blame.