Fair Trading (Ticket Scalping) Amendment Bill

Second Reading

The Hon. R.I. LUCAS (Treasurer) (16:10): I move:

That this bill be now read a second time.

The Fair Trading (Ticket Scalping) Amendment Bill 2018 repeals section 9 of the Major Events Act 2013 and makes amendments to the Fair Trading Act 1987 to increase consumer protection in relation to ticket scalping in South Australia.

The government has committed to taking a number of strong measures to increase consumer protections in relation to ticket scalping. The Fair Trading Act 1987 is administered by Consumer and Business Services and is the appropriate legislation to amend to address the current limitations associated with existing ticket scalping provisions. Ticket scalping is the term given to the unauthorised reselling of tickets to an event at a price higher than the ticket's original face value, sold with the intention of making a profit. In addition to ticket scalping activities that take place at the location and on the day of an event, ticket scalping also occurs via a number of websites, such as eBay, Gumtree and Trading Post.

It is acknowledged that there is a need for a secondary market to allow the legitimate resale of tickets to events, for example, in circumstances where someone may no longer be able to attend an event. However, the existence of a secondary market has both a positive and negative impact for consumers. While it provides consumers with access to tickets, it also exposes them to the risks associated with the unauthorised resale of tickets, including ticket scalping.

Currently, the Major Events Act 2013 requires the government to declare major events in order for the existing ticket scalping provisions to apply. Section 9 of the Major Events Act prohibits the sale or offering for sale of tickets in a controlled area for a major event and in any other case prohibits the sale or offering for sale of tickets to a major event at a price that exceeds the original price by more than 10 per cent.

There are, however, clear limitations with respect to existing ticket scalping provisions, including an inability for the current provisions to be effectively enforced. Further, existing provisions under the Major Events Act do not address technological advances that enable the use of ticket bots—software applications that can perform simple actions such as purchasing a ticket at fractions of the time frame possible by an actual person. Such bots are used to purchase large amounts of tickets in a short period of time, which are later resold at a much higher price for profit. As a result, the availability of tickets to members of the general public at the original face value is significantly reduced and, in order to attend popular events, people are often forced to purchase tickets at a significantly higher amount via the secondary market.

Legislative amendments are therefore required to address these risks and limitations and to increase overall consumer protection with respect to ticket scalping in South Australia. The bill repeals section 9 of the Major Events Act and amends the Fair Trading Act to:

broaden the scope of the legislation so that ticket scalping provisions apply to any sporting or entertainment event in South Australia that is subject to a resale restriction, removing the requirement to declare a major event;

prohibit the advertising or hosting of an advertisement for the resale of tickets to an event in South Australia to which the provisions apply for an amount that exceeds 110 per cent of the original supply cost of the ticket;

require that any resale advertisement must include certain information, including the original supply cost of the ticket and details of the location from which the ticket holder is authorised to view the event, including, for example, any bay number, row number or seat number for the ticket;

restrict a person from selling tickets to an event in South Australia to which the provisions apply for an amount that exceeds 110 per cent of the original supply cost of the ticket;

prohibit the use of software that enables or assists a person to circumvent the security measures of a website in order to purchase tickets for an event in contravention of the terms and conditions; and

enable the minister to require an event organiser to publicly disclose certain information about a particular event, including the total number of tickets available for sale to the general public.

This bill is modelled on similar reforms that commenced in New South Wales on 31 March 2018. These reforms not only increase transparency within the primary market but also enhance consumer protections with respect to the resale of tickets via the secondary market. Consumers will be better able to assess the availability of tickets and will have greater information available to them to make an informed decision when purchasing tickets.

Consumer and Business Services administers the Fair Trading Act and has the necessary systems, processes and structure to carry out a compliance and enforcement function in relation to ticket scalping. Authorised officers are already defined under the Fair Trading Act and subject to the passing of the bill through parliament. Consumer and Business Services authorised officers will monitor compliance with the new provisions and undertake appropriate enforcement activities.

Consumer and Business Services will also provide advice to consumers who have questions or complaints in relation to ticket scalping. Expiable offences have also been introduced to enable quick and effective enforcement in appropriate cases. This will also act as an effective deterrent for others. I commend this bill to members. I seek leave to have the detailed explanation of the clauses inserted into Hansard without my reading them.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Fair Trading Act 1987

4—Insertion of Part 4A

This clause inserts new Part 4A into the principal Act, dealing with ticket scalping:

Part 4A—Regulation of event ticket transactions

Division 1—Preliminary

37A—Interpretation

This section inserts definitions of key terms used for the purposes of new Part 4A.

37B—Tickets to which Part applies

This section specifies tickets to which new Part 4A applies, namely tickets to sporting or entertainment events in South Australia that are subject to a resale restriction. A resale restriction is a term or condition of a ticket that limits the circumstances in which the ticket may be resold or prohibits the resale of the ticket.

37C—Meaning of event organiser

This section defines an event organiser, being the person who authorises the first supply of tickets. It should be noted that an event organiser could be a performer, promoter or operator of an event venue, or a person declared by the regulations.

Division 2—Resale of tickets

37D—Interpretation

This section inserts key definitions for the purposes of the Division. A first purchaser, in relation to a ticket, is defined as the person to whom the ticket is first supplied by an authorised seller. It should be noted that to sell includes to offer or advertise to sell and to supply includes to offer to supply or advertise for supply. It should also be noted that a ticket resale advertisement is defined as an advertisement for the sale of a ticket by any person other than the authorised seller, which is pertinent to the meaning of a prohibited advertisement in proposed section 37F.

37E—Meaning of original supply cost

This section defines the original supply cost of a ticket to be the amount for which the ticket was sold to the first purchaser by an authorised seller. The original supply cost excludes any transaction costs. This definition is relevant to the offences in the measure.

37F—Meaning of prohibited advertisement

This section defines a prohibited advertisement to be a ticket resale advertisement (as defined in proposed section 37D) which specifies an amount for sale of a ticket that exceeds 110% of the original supply cost of the ticket or that fails to specify the original supply cost or details of the location from which the ticket holder is authorised to view the event. This definition is important for the purpose of the offence in proposed section 37I.

37G—Restriction on ticket resale profit

This section makes it an offence for a person to sell a ticket (or offer or advertise to sell a ticket) for more than 110% of the original supply cost.

37H—Supply of tickets not to be made contingent on other purchases

This section makes it an offence to supply a ticket to a person under an agreement which makes the liability of the supplier to supply the recipient with the ticket contingent upon the recipient providing the supplier with consideration for any other goods or services provided by the supplier to the recipient. An offence will not have been committed where such an agreement was authorised by an event organiser, or is an agreement prescribed by the regulations.

37I—Ticket resale advertising

This section makes it an offence for the owner of an advertising publication to publish a prohibited advertisement. A prohibited advertisement is defined in proposed section 37F.

This section defines key terms in relation to the offence, including advertisement, advertising publication and owner. It should be noted that for the purposes of the offence the advertisement need not be a paid advertisement to fall within the ambit of the offence.

A defence is available under subsection (2) should the offence be prosecuted; namely if the defendant establishes that certain steps were taken, including making the placement of ticket resale advertisements subject to terms or conditions prohibiting the publication of such advertisements and taking reasonable steps to remove any advertisement that contravenes the prohibition.

37J—Certain retail restrictions void

This section makes a resale restriction (as defined in proposed section 37B) void if it provides that the ticket be cancelled or rendered invalid if the ticket is resold for an amount not exceeding 110% of the original supply cost of the ticket. This restricts event organisers from providing resale restrictions that are inconsistent with the measure.

Division 3—Online purchase of tickets

37K—Prohibited conduct in relation to use of ticketing websites

This section makes it an offence to use software to enable or assist a person to circumvent security measures of a website to purchase tickets in contravention of the terms of use of the website. This section is targeted at 'ticket bots', or computer software, that purchase large amounts of tickets over a short period of time that are then resold at a later time and for a higher price.

Division 4—Public disclosure of ticketing information

37L—Minister may require notification of number of tickets available for general public sale

This section will enable greater public awareness of access to tickets, as it enables the Minister to make a declaration requiring an event organiser to give public notice of the total number of tickets available for general public sale for a particular event. The Minister can only make a declaration of this kind where the Minister is satisfied that each event organiser to which the notice applies has been notified and has been given reasonable opportunity to make submissions, and where the Minister has considered those submissions and is satisfied that it is in the public interest to make the declaration.

A ticket is not considered by this section to be available for general public sale where the authorised seller requires a person to either pay a fee (in addition to the price of the ticket and any transaction costs) or register for access for a pre-sale, publication, competition or other special offer in order to acquire the ticket.

Schedule 1—Related amendment and transitional provision

Part 1—Amendment of Major Events Act 2013

1—Repeal of section 9

This clause repeals section 9 of the Major Events Act 2013, which currently requires that a major event be declared for certain ticket scalping provisions to apply, and which will not be required once the measures in this Bill are enacted.

Part 2—Transitional provision

2—Transitional provision

This clause provides that certain provisions in relation to the resale or supply of tickets will not apply in relation to any ticket sold or otherwise supplied to a first purchaser by an authorised seller before the commencement of the clause. If a ticket is sold or supplied to a first purchaser from an authorised seller before the commencement of this clause, the specified sections will not apply to any further transactions or advertisements that take place in relation to that ticket.

Debate adjourned on motion of Hon E.S. Bourke.