Federal authorities have launched an aggressive crackdown on ticket scalpers who use sophisticated technology to circumvent purchasing limits, with the Federal Trade Commission seeking tens of millions of dollars in penalties from alleged violators of the Better Online Ticket Sales Act.
The enforcement actions target Maryland-based Key Investment Group and its affiliated entities, whose executives allegedly orchestrated elaborate schemes to bypass Ticketmaster’s security measures and purchasing restrictions.
Federal crackdown zeroes in on Key Investment Group’s sophisticated operation to circumvent Ticketmaster’s purchasing safeguards.
According to the FTC’s complaint, these scalpers deployed a complex arsenal of technological tools to acquire tickets in bulk, subsequently reselling them at inflated prices on secondary markets. Their tactics included creating thousands of fictitious Ticketmaster accounts, employing virtual credit cards to obscure transaction origins, and using IP address spoofing to mask their true locations.
The scalpers also utilized SIM boxes to intercept verification codes, effectively circumventing Ticketmaster’s multi-factor authentication processes.
The impact on consumers has been substantial, with high-profile events bearing the brunt of these illegal operations. During Taylor Swift’s Eras Tour, which imposed a six-ticket purchase limit per buyer, the defendants allegedly used 49 separate accounts to acquire 273 tickets for a single performance.
Similarly, a Bruce Springsteen concert in 2023 saw over 1,500 tickets scooped up through illicit means despite a four-ticket limit, generating millions in profits for resellers while leaving genuine fans unable to attend at reasonable prices.
The legal action is grounded in the BOTS Act, which specifically prohibits the circumvention of technological measures implemented by ticket sellers to enforce purchasing limits. These illegal practices undermine the royalty collection systems managed by performance rights organizations that ensure artists receive fair compensation for their work. These schemes directly impact artists’ live performance revenue, which is a critical income stream for musicians in today’s industry. FTC Chairman Andrew N. Ferguson has emphasized the agency’s commitment to enforcing actions against anticompetitive ticket methods. Key Investment Group has now filed a lawsuit against the FTC in an attempt to halt the agency’s enforcement efforts.
The Department of Justice is conducting a parallel investigation into Live Nation and Ticketmaster regarding broader concerns about concert promotion and ticketing practices.
These enforcement efforts represent a coordinated federal response to increasing consumer frustration over ticket accessibility and pricing.
As cases proceed through the U.S. District Court system, authorities aim to establish stronger deterrents against anticompetitive practices in the ticket resale market, ensuring fairer access for consumers while holding bad actors financially accountable for their schemes.
