BILL ANALYSIS                                                                                                                                                                                                    







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        |Hearing Date:July 1, 2013          |Bill No:AB                         |
        |                                   |329                                |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                              Senator Ted W. Lieu, Chair


                           Bill No:        AB 329Author:Pan
                         As Amended:  May 7, 2013 Fiscal:  Yes

        
        SUBJECT:  Ticket sellers:  equitable online ticket buying process:   
        sale or use of circumventing software. 
        
        SUMMARY:  Makes it a misdemeanor to intentionally use or sell software  
        to circumvent a security measure, access control system or other  
        control or measure on a ticket seller's Web site that is used to  
        ensure an equitable ticket buying process.

        Existing law:
        
        1) Requires a ticket seller to have a permanent business address from  
           which tickets may only be sold and requires that address to be  
           included in any advertisement or solicitation, and requires a  
           ticket seller to be licensed, as may be required by any local  
           jurisdiction.  Provides that a violation of this requirement shall  
           constitute a misdemeanor punishable by imprisonment in a county  
           jail not exceeding six months, or by fine not exceeding $2,500, or  
           by both.  Provides that any person who engages, has engaged, or  
           proposes to engage in a violation of this section shall be liable  
           for a civil penalty not to exceed $2,500 for each violation, which  
           may be assessed and recovered in a civil action brought in the name  
           of the people of the State of California by the Attorney General,  
           or a district attorney, or a city attorney of a city having a  
           population in excess of 750,000, and, with the consent of the  
           district attorney, by a city prosecutor in any city, county, or  
           city and county having a full-time prosecutor in any court of  
           competent jurisdiction.  States that each ticket sold or offered  
           for sale in violation of constitutes a separate violation.   
           (Business and Professions Code (BPC)  22500)






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        2) Requires a ticket seller shall maintain records of ticket sales,  
           deposits, and refunds.  
        (BPC  22501)

        3) Requires a ticket seller shall, prior to sale, disclose to the  
           purchaser by means of description or a map the location of the seat  
           or seats represented by the ticket or tickets.  (BPC  22502)  

        4) Provides that it is unlawful for a ticket seller to contract for  
           the sale of tickets or accept consideration for payment in full or  
           for a deposit for the sale of tickets unless the ticket seller  
           meets one or more of the following requirements:  (BPC  22502.1)

            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 at a certain price from a person in possession of  
              the ticket or from a person who has a contractual right to  
              obtain the ticket from the primary contractor.

            c)    The ticket seller informs the purchaser orally at the time  
              of the contract or receipt of consideration, whichever is  
              earlier, and in writing within two business days, that the  
              seller does not have possession of the tickets, has no contract  
              to obtain the offered ticket at a certain price from a person in  
              possession of the ticket or from a person who has a contractual  
              right to obtain the ticket from the primary contractor, and may  
              not be able to supply the ticket at the contracted price or  
              range of prices.

            d)    Provides that nothing in the above requirements shall  
              prohibit a ticket seller from accepting a deposit from a  
              prospective purchaser as part of an agreement that the ticket  
              seller will make best efforts to obtain a ticket at a specified  
              price or price range and within a specified time, provided that  
              the ticket seller informs the purchaser orally at the time of  
              the contract or receipt of consideration, whichever is earlier,  
              and in writing within two days, of the terms of the deposit  
              agreement, and includes in the oral and written notice the  
              disclosures otherwise required by this section.

        1) Provides that it is unlawful for a ticket seller to represent that  
           he or she can deliver or cause to be delivered a ticket at a  
           specific price or within a specific price range and to fail to  
           deliver within a reasonable time or by a contracted time the  
           tickets at or below the price stated or within the range of prices  





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           stated.  (BPC  22502.2)

        2) Provides that in addition to other remedies, a ticket seller who  
           violates BPC 22502.1 or BPC 22502.2 above and fails to supply a  
           ticket at or below a contracted price or within a contracted price  
           range shall be civilly liable to the ticket purchaser for two times  
           the contracted price of the ticket, in addition to any sum expended  
           by the purchaser in nonrefundable expenses for attending or  
           attempting to attend the event in good faith reliance on seat or  
           space availability, and reasonable attorney's fees and court costs.  
            (BPC  22502)  

        3) Defines "ticket seller" as any person who for compensation,  
           commission, or otherwise sells admission tickets to sporting,  
           musical, theatre, or any other entertainment event.  
        (BPC  22503)

        4) Defines "Primary contractor" as the person or organization who is  
           responsible for the event for which tickets are being sold.   
           Provides that the requirements for ticket sellers do not apply to  
           any primary contractor or seller of tickets for the primary  
           contractor operating under a written contract with the primary  
           contractor.  (BPC  22503.5)

        5) Provides that the requirements for ticket sellers do not apply to  
           officially appointed agent of an air carrier, ocean carrier or  
           motor coach carrier who purchases or sells tickets in conjunction  
           with a tour package accomplished through the primary event promoter  
           or his or her agent by written agreement.  (BPC  22503.6)

        6) Provides that the requirements for ticket sellers do 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, including, but not limited to, designated parking  
           areas and points of entry to the event.  (BPC  22504)

        7) States that a violation of any provision governing the above  
           requirements for ticket sellers constitutes a misdemeanor.  (BPC   
           22505) 

        8) Provides that any partial or full deposit received by a ticket  
           seller on a future event for which tickets are not available shall  
           be refundable except for a service charge of not more than 10  
           percent until tickets for the event are actually available.  (BPC   
           22506)






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        9) Provides that the ticket price of any event which is canceled,  
           postponed, or rescheduled shall be fully refunded to the purchaser  
           by the ticket seller upon request.  Provides that any local  
           jurisdiction may require a ticket seller to provide a bond of not  
           more than $50,000 to provide for any refunds that may be required  
           by this section.  (BPC  22507)

        10)Requires a ticket seller to disclose that a service charge is  
           imposed by the ticket seller and is added to the actual ticket  
           price by the seller in any advertisement or promotion for any event  
           by the ticket seller.  (BPC  22508)

        11)Requires any ticket seller who includes tickets to an event in  
           conjunction with the sale of a tour or event package, including,  
           among other things, transportation, meals, lodging, or beverages,  
           shall disclose in any advertisements or promotional materials the  
           price charged or allotted for the tickets.  (BPC  22509)

        12)States that the requirements for ticket sellers above do not apply  
           to any nonprofit charitable tax-exempt organization selling tickets  
           to an event sponsored by the organization.  
        (BPC  22503.5)

        This bill:

        1) Provides that in addition to requirements for ticket sellers under  
           current law, a person who intentionally uses or sells software to  
           circumvent a security measure, access control system or other  
           control or measure on a ticket seller's Web site that is used to  
           ensure an equitable ticket buying process is guilty of a  
           misdemeanor.

        FISCAL EFFECT:  According to the Assembly Committee on Appropriations  
        analysis dated May 15, 2013, this bill will result in potential minor  
        non-reimbursable costs to cities and counties for enforcement, offset  
        to some extent by fine revenues.

        COMMENTS:
        
        1. Purpose.  The  Author  is the  Sponsor  of this bill.  According to the  
           Author, this bill is designed to protect the rights of consumers by  
           stopping robotic ticket-buying software programs that jump ahead of  
           the line and create instant sellouts of entertainment events before  
           the average consumer has a chance.  The Author states that these  
           tickets are then resold at extremely high costs, thus forcing a fan  
           to spend more money to attend the event without having had the  





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           chance to get a face value ticket.  According to the Author, AB 329  
           will create consumer protections for people trying to buy tickets  
           by stopping "bots," machines designed by resellers to buy up all of  
           the tickets before the general public. 

        2. "Bots" and Attempts to Curb Their Use.  "Bots" are robotic ticket  
           buying software programs that allow users to quickly buy tickets  
           online.  Typically, these are used by unscrupulous actors like  
           ticket scalpers to buy tickets, then turn around and sell the same  
           tickets at increasingly higher prices.  Over the past several  
           years, numerous high profile concert ticket sales have been  
           impacted by the presumed use of "bots" in that individuals wait  
           online to purchase tickets while software programs allow their  
           users to jump to the front of the line and purchase large numbers  
           of tickets at one time.  According to the Author, this scenario  
           often leads to concerts and other high profile events selling out  
           in a matter of minutes, leaving fans ticketless and forcing them to  
           spend more money to attend an event.

           According to information provided by the Author, the ticket  
           industry has attempted to combat problems caused by "bots" by  
           employing other technological means, such as "Completely Automated  
           Public Turing tests to tell Computers and Humans Apart" (CAPTCHA),  
           which include phrases and picture tests at the point of sale during  
           the online transaction to differentiate between a human purchaser  
           and a likely computer program.  CAPTCHA tests, such as typing  
           characters into a box, are designed to prevent the use of "bots"  
           because the requested task is typically one that can be completed  
           by a person but would be difficult for a robotic software program  
           to accurately perform.  

           Supporters of efforts to restrict the use of "bots" assert that  
           even these technological efforts are not completely successful  
           because the problem of instant sellouts and increased resale prices  
           for tickets continues to generate complaints from the ticket-buying  
           public.  California joins a number of states including Tennessee,  
           Michigan, New Jersey, New York, Connecticut and Minnesota who have  
           waded into the debate and considered or passed legislation imposing  
           bans on "bots" and establishing stiff penalties to those who use  
           these systems.  

        3. Prior Related Legislation.  AB 2612  (Plescia, 2008) was a spot bill  
           to amend the ticket seller's provisions of the Business and  
           Professions Code.  (  Status:   The bill was held in the Assembly  
           Committee on Rules without referral.)






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            SB 1022  (Campbell, 2006) would have included Licensed Ticket  
           Sellers, and other businesses, eligible to organize as Limited  
           Liability Corporations (LLC).  (  Status:   The bill was not ever  
           heard in a Senate policy committee.) 

            SB 1602  (Battin, 2006) would have expanded the definition of  
           scalping under the Penal Code, to extend the prohibition against  
           selling event tickets purchased for resale above market value on  
           the event premises, to any purchase of tickets for resale in an  
           amount over the limitation on the maximum number of tickets allowed  
           by the original ticket seller and for any amount of profit. The  
           bill also would have criminalized the use of automated computer  
           purchases of event tickets in order to accomplish the purchase  
           above the seller's limit, by defining the practice as "criminal  
           interference" with the seller's Web site. (  Status:   The bill was  
           not heard on the Senate Floor at the request of the Author.)

        4. Arguments in Support.   eBay, Inc.  and  StubHub  write in support of  
           AB 329, noting that "protecting fan's ability to access tickets to  
           their favorite events in a safe, reliable and consumer friendly  
           environment that protects against fraud and abuse is of significant  
           importance to ensuring a positive overall experience".  They add  
           that "passage of AB 329 furthers this goal by addressing the  
           well-established black market of unregulated scalpers by  
           prohibiting  the use of robotic ticket-buying software, or "bots",  
           and that this bill would eliminate this abusive practice."  eBay  
           and StubHub call this bill an important step forward to achieving  
           and protecting consumer choice.


        SUPPORT AND OPPOSITION:
        
         Support:  

        eBay, Inc.
        StubHub
        Two individuals

         Opposition:  

        None on file as of June 25, 2013.


        Consultant: Sarah Mason







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