Photo Credit: Emilipothèse

A federal judge rules that the FTC can absolutely pursue litigation against Ticketmaster under the BOTS Act for allegedly enabling mass-scale ticket resale. The case will now proceed to discovery.

On Monday, a judge ruled against Ticketmaster’s motion to dismiss the lawsuit that the Federal Trade Commission (FTC) filed last year, which alleges that Ticketmaster enabled the mass-scale resale of tickets on its secondary platform. The decision reinforces that the FTC can absolutely sue Ticketmaster under the Better Online Ticket Sales (BOTS) Act, and the case will now move into evidence discovery.

The ruling does not determine whether the FTC’s allegations are factually true, but that the plaintiffs have stated valid legal claims. Ticketmaster’s motion to dismiss had argued that the FTC’s lawsuit was flawed because the government entity could not hold a ticketing platform accountable under the BOTS Act, which it asserted was designed to be used against individual resellers.

But Judge Maame Ewusi-Mensah Frimpong rejected that argument in a court order dated September 28, writing, “The BOTS Act does not preclude platforms from facing liability, and the court will not read it as doing so.”

The FTC originally sued Ticketmaster and its parent Live Nation for allegedly violating the BOTS Act by allowing brokers to bypass its ticket purchasing limits with hundreds or thousands of accounts under fake names. The lawsuit claims that Ticketmaster enabled this behavior so that brokers would resell much of their haul on the platform’s own secondary market and generate even more money in resale fees.

Live Nation and Ticketmaster have denied the allegations. Earlier this year, Live Nation’s Legal Chief Dan Wall testified before Congress that the company has made numerous anti-broker initiatives in the name of protecting artists and fans. While that may be true, the company’s argument that it can’t be sued under the BOTS Act as a primary ticketing platform didn’t hold any water in court.

Judge Frimpong determined that the FTC’s lawsuit presents sufficient allegations that Ticketmaster enabled ticket brokers to bypass purchase limits, citing an internal email in which a senior executive admitted that the company looks the other way “as a matter of policy” to such broker conduct. Other evidence reportedly shows that Ticketmaster was aware of specific brokers who frequently engaged in such conduct.

“Live Nation and Ticketmaster could have implemented measures to curtail continuing violations of ticket purchase limits,” Judge Frimpong wrote. “However, the FTC maintains that Live Nation and Ticketmaster ‘have reduced, discontinued, or declined to implement the use of tools that could effectively enforce ticket limits against brokers,’ thereby enabling circumvention.”

The complaint therefore illustrates that Live Nation and Ticketmaster were aware of such violations and allowed brokers to bypass ticket purchase limits—and therefore demonstrates a strong enough argument to proceed to trial.

The court’s decision comes as Live Nation awaits the results of its appeal and the sentencing of its highly publicized antitrust trial. A jury determined that the two companies actively worked to suppress their competition, but it remains unclear whether the court will heed the requests of dozens of state attorneys general and break up the Live Nation-Ticketmaster marriage.