Digital Services Act will have major impact on secondary ticketing

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The Face-value European Alliance for Ticketing (FEAT) has welcomed the news that the European Parliament has voted to approve new regulations that help prevent online marketplaces being abused by professional sellers.

The Digital Services Act (DSA) was approved by the European Parliament with 539 votes in favour, 54 votes against and 30 abstentions. FEAT, a non-profit organisation formed to promote better ticket resale practices across Europe, has spent the past two years lobbying for the DSA to introduce tougher rules for ticket resale marketplaces.

The new rules will help prevent abuses on online marketplaces, including ticket resale sites. They include measures to ensure professional sellers are identifiable, prevent certain manipulative sales tactics, and require regular reporting to improve transparency for consumers. The act is expected to have major impact on secondary ticketing.

The Digital Services Act means:

  • Online marketplaces will be required to obtain essential information about third party professional sellers, from their name and contact details, to their bank details and ID, before traders are allowed to list tickets on the platform. They will also be required to make best efforts to assess whether the information is reliable and complete, and ensure that the seller’s name, contact and trading details appear on the listing, as well as conduct random checks to prevent the resurfacing of listings that contravene national laws.
  • Whilst ticket resale platforms can claim to be exempt from liability for content provided by third parties, provided they are not active hosts, they could now be held responsible for tickets listed in contravention of national laws, where fans are led to believe that the ticket is provided by the platform itself or that the seller is acting under its control. As a result, resale platforms should make it clear throughout the buying process that the tickets listed are provided by a third party.
  • Dark patterns (user interfaces designed in such a way as to trick users into making certain decisions, such as “pop-ups” or giving prominence to specific choices) will be prohibited. As such, ticket resale sites will be banned from using design tricks that manipulate consumers.
  • Online hosting platforms such as ticket resale sites ​​will be required to produce easily comprehensible and publicly-available annual reports on any content moderation activities relating to infringements of the law or the platform’s terms and conditions. This will give an indication of the scale of harmful activity taking place – important in helping enforcement agencies and advertising partners such as Google comprehend the scope of the problem. The reporting measures will be coupled with a simplified notice and action procedure for illegal listings.
  • Every Member State will be required to appoint a Digital Services Coordinator (DSC) to enforce the rules laid out in the DSA, with far-reaching powers of investigation, including to carry out on-site inspections, interview staff members and require the production of documents and information. Penalties for non-compliance can reach up to six per cent of platforms’ global turnover.

The DSA will now go through the formal adoption procedures by the European Council before it is published in the EU Official Journal. It will enter into force 20 days after its publication in the Official Journal of the European Union, and its provisions will mainly apply 15 months after entry into force or from January 1, 2024, whichever comes later.

Sam Shemtob, director of FEAT, said: “The introduction of the Digital Services Act is a key moment for the live events sector in the UK, as well as across Europe. The new legislation regulating online marketplaces will see EU countries catch up with the UK in terms of stricter rules for verifying professional sellers and making sure fans know who they’re buying from. This will directly impact all UK artists who tour Europe, as well as make it harder for UK touts to operate under the guise of anonymity on European ticket resale sites.”

Per Kviman, CEO of Versity Music and chair of the European Music Managers Alliance (EMMA), which represents 1800 music managers in 10 European countries, said: “The European Music Managers Alliance (EMMA) is very pleased to see new rules which protect both artists and the ticket-buying public have been approved by the European Parliament. This is an important step towards increasing accountability and to prevent scams, which will contribute towards a healthier European touring industry.”

Despite COVID-19, the European secondary ticketing market was estimated to be worth €1.83bn in 2021, with predictions to grow to €2.29bn by 2023.