The Federal Trade Commission filed a lawsuit against a Maryland-based ticket resale company on Monday, alleging that the company broke federal law to obtain hundreds of thousands of tickets to Taylor Swift‘s Eras tour and other major concerts and scalp them for millions of dollars in profit.
In the lawsuit, filed in federal court on Monday and reviewed by The Hollywood Reporter, the FTC alleged that Key Investment Group violated the Better Online Ticket Sales Act — better known as the BOTS Act — to work around Ticketmaster’s ticket purchase limits and obtain nearly 380,000 concert tickets between November of 2022 and December of 2023. The company spent about $57 million for the tickets and resold them for about $64 million.
The FTC alleged that to secure so many tickets, the company used “thousands of fictitious Ticketmaster accounts, thousands of virtual and traditional credit card numbers, proxy or spoofed IP addresses, and SIM banks to bypass or otherwise avoid security measures” on Ticketmaster.
Per the lawsuit, between March and August of 2023, Key Investment Group had bought about 2,280 tickets for Swift’s 38 Eras Tour show dates, exceeding the shows’ six-ticket-per-customer limit, buying them for about $744,970.29 and reselling them for $1,961,980.65. At just one of Swift’s Allegiant Stadium shows in Las Vegas, the company used 49 different accounts to secure 273 tickets, reselling them for $119,227.21 in net profit.
Meanwhile for a 2023 Bruce Springsteen show at MetLife Stadium, Key Investment group used 277 different accounts to secure over 1,500 tickets, marking them up for a combined $21,000 in revenue.
The FTC’s lawsuit comes months after President Donald Trump signed an executive order back in March calling for increased of the BOTS Act. Until now, the BOTS Act had only been enforced one time since it was passed into law back into 2016.
“President Trump made it clear in his March Executive Order that unscrupulous middlemen who harm fans and jack up prices through anticompetitive methods will hear from us,” FTC Chairman Andrew N. Ferguson said in a statement. “Today’s action puts brokers on notice that the Trump-Vance FTC will police operations that unlawfully circumvent ticket sellers’ purchase limits, ensuring that consumers have an opportunity to buy tickets at fair prices.”
In an unprecedented move, the FTC has twisted the intent of the Better Online Ticket Sales (BOTS) Act, a law designed to target malicious software, into a weapon against legitimate businesses and consumers,” a representative for KIG said in a statement. “Under the FTC’s interpretation, anyone who purchases more than four tickets or uses more than one account could be deemed in violation of federal law. That outcome is not only illogical, it’s absurd. Even more troubling, the FTC misleadingly characterizes Key Investment Group’s use of standard internet browsers to purchase tickets as equivalent to deploying unlawful software. This portrayal is both deceptive and malicious. Key Investment Group is prepared to vigorously defend itself against this clear example of regulatory overreach.
The company had filed a lawsuit of its own against the FTC back in July over this case’s investigation, arguing that KIG has fully complied with the BOTS Act.
“The Better Online Ticket Sales (BOTS) Act is intended to address bad actors using ticket bots, or specialized computer scripts, to find ways to circumvent the ticket buying security systems and secure large volumes of event tickets before consumers have a chance to buy. This is not what KIG does,” the company said in a release at the time.
The FTC suit is just the latest in a busy year for government intervention in the live music business. Last month, the DOJ indicted Oak View Group CEO Tim Leiweke on bid-rigging allegations over the development of the Moody Center in Austin Texas. (Leiweke stepped down from the company but denied the DOJ’s allegations.) Back in May, as part of Trump’s executive order, the DOJ and FTC launched a public inquiry into the live music business.
The FTC’s suit has been applauded by other stakeholders in the live music business who’ve advocated for more enforcement in the ticketing industry. The National Independent Venue Association’s executive director Stephen Parker called the suit, “a momentous step toward finally holding ticket brokers and resale platforms accountable for violating the BOTS Act.”
“Fans and independent stages have been waiting years for real enforcement, and we hope this marks the beginning of a new era of rigorous oversight,” Parker said in a statement. “We applaud today’s actions and urge the FTC to keep going and ramp up its work to protect fans, artists, and stages from illegal bots and other methods intended to circumvent the law.”
