JAY GOLDBERG: Smith’s consumer protection bill needs fixing

Article content

As the months tick down before the next election, governments frequently look for ways to introduce new measures to shore up their support among the voting public.

Article content

One often predictable and cost-effective way of doing so is to introduce new consumer protection legislation, as governments looking somewhat long in the tooth try to convince the public they’re still on the side of the every-day voter.

Article content

Recommended Videos

Article content

Enter Alberta’s United Conservatives.

Last month, Premier Danielle Smith’s UCP government tabled Bill 34, which the legislation’s chief spokespersons are trying to sell as a consumer protection bill. The legislation includes a whole host of reforms to Alberta’s consumer protection legislation, but among the highlights is a plan to regulate the secondary ticket market in the province, with the government opening the door to a possible cap on ticket resale prices in the future.

Unintended harm

While capping the price of tickets sold on platforms like StubHub and SeatGeek may sound like a winning proposition to both governments and voters, the reality is the Smith government’s move to further regulate the secondary ticket market will actually harm Alberta consumers.

Article content

Article content

First of all, further regulating Alberta’s secondary ticket market hands a big win to Live Nation/Ticketmaster. That’s because it allows the company to further strengthen its monopoly on ticket sales.

As it stands now, 80% of all major venues sell through Live Nation/Ticketmaster. More regulation of the ticket resale market, or a potential price cap, will result in higher primary ticket prices and worse service, as a monopoly becomes further empowered to do whatever it wants and treat consumers however it pleases.

Keep in mind, we’re talking about a monopoly in Live Nation/Ticketmaster that settled a case with the U.S. Department of Justice for over US$200 million in damages earlier this year in response to antitrust allegations.

Beyond the issue of further empowering a monopoly, there’s also the issue of enforcement, something the Ford government, which recently enacted a face-value ticket resale cap in Ontario, is having to grapple with.

Article content

The U.S. Government Accountability Office and academic studies around the world have found resale price caps ultimately push consumers to unregulated platforms like Facebook Marketplace and TikTok instead of halting the practice of buying more expensive tickets on other platforms entirely.

In Ireland, a country that has a price cap law in place, fraud rates for concerts were found to be as high as 14.1%.

Consumers who buy their tickets on unregulated platforms and show up to concerts or sporting events are out their money entirely, whereas those who buy their tickets on a regulated platform would be entitled to get their money back.

Sites like StubHub and SeatGeek offer consumer guarantees, whereas unregulated platforms on social media do not.

Doesn’t add up

Pushing Alberta consumers to purchase concert or sporting event tickets on unregulated platforms is a far cry from actually protecting consumers.

Then, there’s the economic argument. A study done in the U.K. estimated up to 25% of potential resellers in the U.K. would choose not to resell their tickets should a face-value ticket resale cap be enacted there, with many simply choosing to leave those seats empty. That, in turn, would cost the economy hundreds of millions of dollars in forgone revenue for concessions, travel, and hotels.

Article content

Can Alberta’s economy really afford to leave that kind of economic activity on the table?

Smith’s legislation opens to the door to a ticket resale price cap in Alberta, which would empower a monopoly in Live Nation/Ticketmaster, encourage more black-market ticket resale activity, and cost the economy dearly in terms of economic activity and jobs.

Alberta would be wise to learn from the mistakes of jurisdictions elsewhere that have turned to capping ticket resale prices as a gimmicky fix to dealing with high ticket prices and turn to real reform that actually deals with the pernicious monopoly in Live Nation/Ticketmaster that is causing real harm to consumers.

Jay Goldberg is the North American Affairs Manager at the Consumer Choice Center

Article content