BILL ANALYSIS Ó 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 AB 329 Page 2 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 AB 329 Page 3 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. AB 329 Page 4 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 AB 329 Page 5 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