BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 329
                                                                  Page  1

          Date of Hearing:  April 30, 2013

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                Bob Wieckowski, Chair
                      AB 329 (Pan) - As Amended:  April 25, 2013

                              As Proposed to Be Amended
           
          SUBJECT  :  TICKET SELLERS: EQUITABLE ONLINE TICKET BUYING  
          PROCESS: CIRCUMVENTING SOFTWARE

           KEY ISSUE  :  SHOULD THE USE OF ROBOTIC TICKET-BUYING SOFTWARE TO  
          CIRCUMVENT CONSUMER PROTECTION MEASURES EMPLOYED BY TICKET  
          ISSUERS ON THEIR WEBSITES BE PROHIBITED BY LAW?

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

                                      SYNOPSIS
          
          This non-controversial bill seeks to make it a misdemeanor for  
          any person to use software to circumvent a security measure,  
          access control system, or other control or measure on a ticket  
          seller's Internet Web site that is used to ensure an equitable  
          ticket buying process.  This bill would also make the sale of  
          such software, known as robotic ticket buying software (or  
          "bots" for short) a misdemeanor.  According to the author, the  
          unregulated use of bots allows scalpers to unfairly create  
          instant sellouts of events before the average fan has a chance  
          to obtain tickets.  These persons subsequently sell the tickets  
          they have purchased through bots at highly marked up prices,  
          forcing fans to pay more for tickets when they have not had any  
          fair opportunity to purchase a face-value ticket directly from  
          the ticket issuer or event organizer.  The author has proposed a  
          single technical amendment to close a loophole that created some  
          unintended exemptions to the bill due to its placement within  
          the code.  

          Recent amendments to the bill taken in the Assembly Arts &  
          Entertainment Committee limit the bill to only the current  
          prohibition of the sale or use of robotic ticket buying  
          software.  Several professional sports teams and other ticket  
          sellers who previously opposed the bill now support it, and  
          there is no known opposition to the current version of the bill.

           SUMMARY  :  Provides that a person who intentionally uses or sells  








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          software to circumvent a security measure, access control  
          system, or other control or measure on a seller's Internet Web  
          site that is used to ensure an equitable ticket buying process  
          is guilty of a misdemeanor.

           EXISTING LAW  :  

          1)Declares that it shall be unlawful for a ticket seller to  
            contract for the sale of tickets or accept consideration for  
            the sale of tickets unless the ticket seller meets one or more  
            of the following requirements:

             a)   The ticket seller has the ticket in his or her  
               possession.  
             b)   The ticket seller has a written contract to obtain the  
               offered ticket, as specified.
             c)   The ticket seller informs the purchaser that the seller  
               may not be able to supply the ticket at the contracted  
               price or range of prices, as specified.  (Business &  
               Professions Code Section 22502.1.  Unless otherwise stated,  
               all further references are to this code.)

          2)Makes failure to deliver the tickets within a reasonable time  
            or by a contracted time, at or below the price stated or  
            within the range of prices stated, punishable as a  
            misdemeanor.  (Section 22505.)

          3)Requires that a ticket seller shall disclose any service  
            charges assessed, as provided.  (Section 22508.)

          4)Provides that a violation of any of these provisions  
            constitutes a misdemeanor, and in addition authorizes a civil  
            penalty not to exceed two thousand five hundred dollars  
            ($2,500) for each violation, which may be assessed and  
            recovered in a civil action brought in the name of the people,  
            as specified.  (Section 22500(c).)

          5)Provides that any person who, without the written permission  
            of the owner or operator of the property on which an  
            entertainment event is to be held or is being held, sells a  
            ticket of admission to the entertainment event, which was  
            obtained for the purpose of resale, at any price which is in  
            excess of the price that is printed or endorsed upon the  
            ticket, while on the grounds of or in the stadium, arena,  
            theater, or other place where an event for which admission  








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            tickets are sold is to be held or is being held, is guilty of  
            a misdemeanor.  (Penal Code Section 346.)  

           COMMENTS  :  This non-controversial bill seeks to make it a  
          misdemeanor for any person to use software to circumvent a  
          security measure, access control system, or other control or  
          measure on a ticket seller's Internet Web site that is used to  
          ensure an equitable ticket buying process.  This bill would also  
          make the sale of such software, known as robotic ticket buying  
          software (or "bots" for short) a misdemeanor.

           Need for the bill  :  According to the author, robotic  
          ticket-buying software ("bots") are designed to bombard online  
          box office websites with thousands of simultaneous purchase  
          requests, thereby bypassing the principle of first-in-line and  
          creating instant sellouts of events before the average fan has a  
          chance to obtain tickets.  The author states that the  
          entertainment industry has continuously blamed "instant  
          sellouts" on the unregulated use of bots by scalpers, who then  
          turn around and sell the tickets at severely marked up prices,  
          forcing fans to pay higher prices for tickets without having had  
          any opportunity to purchase a face-value ticket from the ticket  
          issuer or event organizer.  To address these problems, this bill  
          would prohibit the use or sale of robotic ticket-buying  
          software, and making violations punishable by a misdemeanor.

           Technological attempts to combat robotic-ticket buying software  
          have not been entirely successful.   According to the author, the  
          ticket industry has attempted to combat the problems caused by  
          bots by employing other technological means such as CAPTCHA  
          phrases and pictures tests at the point of sale during the  
          online transaction.  Visitors to any ticket selling website in  
          recent years may recall having been instructed to view a  
          distorted image of a word or phrase and type the characters into  
          a response box before being allowed to purchase tickets on the  
          website.  This type of CAPTCHA test is designed to prevent the  
          use of bots because the requested task is one that a person can  
          complete correctly in virtually every case, but is difficult for  
          a robotic software program to accurately perform.  Variations of  
          CAPTCHA methods involve visual identification of common objects  
          like animals or fruit rather than words or phrases; in either  
          case, the idea is that correct responses to CAPTCHA requests can  
          be reliably presumed to have been entered by a person using the  
          ticket website, and not an automated software program.









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          According to supporters of the bill, however, these  
          technological efforts do not appear to have been very successful  
          because the problem of instant sellouts and increased resale  
          prices for tickets continues to generate complaints from the  
          ticket-buying public.  This bill seeks to address the novel  
          problem caused by the rise of bot software by prohibiting the  
          use and sale of any software that "circumvents a security  
          measure, access control system, or other control or measure on a  
          seller's Internet Web site that is used to ensure an equitable  
          ticket buying process."

           Proposed amendment removing unintended exemptions  .  Existing law  
          regulating ticket sellers (Chapter 21 of Division 8 of the  
          Business and Professions Code) specifies conduct by a ticket  
          seller that is punishable as a misdemeanor, including, among  
          other requirements, maintaining and disclosing a permanent  
          business address, disclosing any service charge, and delivering  
          purchased tickets within contracted-for time and price  
          parameters.  This bill expressly makes the use or sale of  
          robotic ticket buying software, as defined, a misdemeanor.  The  
          Committee notes, however, that several types of ticket-selling  
          entities are exempted from Chapter 21, presumably for policy  
          reasons that make regulation of ticket selling conduct by those  
          entities unnecessary.  (See, e.g. Section 22511, which exempts  
          "any nonprofit charitable tax-exempt organization selling  
          tickets to an event sponsored by the organization," but also see  
          Section 22504, stating "This chapter does not apply to any  
          person who sells six tickets or less to any one single event,  
          provided the tickets are sold off the premises where the event  
          is to take place?")

          Because this bill prohibits questionable conduct not by the  
          ticket seller, but by those seeking to thwart consumer  
          protection measures used by the ticket seller, there may be  
          unwanted loopholes created by applying existing exemptions to  
          Chapter 21 to the conduct prohibited by this bill. It does not  
          appear to be the author's intent to exempt "any person who sells  
          six tickets or less to any one single event, provided the  
          tickets are sold off the premises," or any person or entity for  
          that matter, from the prohibitions of this bill.

          Accordingly, the author may wish to consider the following  
          amendment:

               On page 8, line 39, strike "A" and insert "Notwithstanding  








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               any other provision of law, a"

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Fan Freedom
          Ebay, Inc.
          Stub Hub
          American Bus Association
          Bonnie J. Addario Lung Cancer Foundation
          Broadway League
          California Consumer Affairs Association
          Consumer Action
          Consumer Federation of America
          National Consumer League
          National Tour Association 
          San Francisco 49ers
          Shorenstein Hays Nederlander Theaters
          TechNet
          TechAmerica
          United Motorcoach Association 
          Several individuals

           Opposition 
           
          None on file
           
          Analysis Prepared by  :   Anthony Lew / JUD. / (916) 319-2334