My Lords, we are coming to the final stages of the Consumer Rights Bill—an important reform of consumer law. I am looking forward to it receiving Royal Assent so that consumers have new, simplified rights when they buy goods, services or digital content and businesses can plan with certainty for the legislation to come into force.
The one remaining issue to resolve is the proposals for the secondary ticketing market. I would like to start by thanking those who have engaged in a really constructive dialogue with us over the past few weeks: the noble Lord, Lord Moynihan, and his team, other noble Lords, clerks of the House and the long-suffering departmental teams, both ministerial and official. It has been a long two months since we last debated the issue and I thought it would be helpful to give a summary of the issue and the Government’s proposals. Before I start, it may be helpful to make clear to noble Lords that I intend to support the amendment tabled by the noble Lord, Lord Moynihan, to facilitate the smooth passage of this important Bill.
The amendment to the Bill made by noble Lords at Report stage demonstrated the House’s concern about some aspects of the online secondary ticketing market. A range of issues were raised. The noble Lords, Lord Moynihan and Lord Grade, and others drew our attention to the level of fraud in the market, which was suggested by the National Fraud Authority to be £1.5 billion per year. The Baroness, Lady Grey-Thompson, and other noble Lords gave heart-wrenching examples of fans arriving at a venue looking forward to a wonderful evening only to be turned away because they had bought counterfeit tickets. They argued that the current rules in place to protect consumers were not effective enough.
The noble Baroness, Lady Heyhoe Flint, the noble Lords, Lord Clement-Jones and Lord Deben, and others had done their own research into tickets available on the secondary market and expressed concern about the lack of transparency. The noble Lords, Lord Holmes and Lord Moynihan, and others were concerned that
alleged profiteering might be taking funding away from sports or cultural activity and reducing opportunities for genuine fans who could not afford high prices.
The noble Lord, Lord Stevenson, the noble Baroness, Lady Hayter, and the noble Lord, Lord Holmes, have been especially keen to resolve this issue as part of the Consumer Rights Bill, in order to allow fans to access events and have similar protection to that used for the London 2012 Olympics.
Of course, many of those who spoke, including the noble Lords, Lord Stoneham and Lord Borwick, the noble Viscount, Lord Younger, and the noble Baroness, Lady Wilcox, agreed with me about the importance of a thriving secondary ticket market and the need to ensure that the market remains open and competitive. I think that that sentiment is shared more widely across the House. The secondary marketplaces can provide a much safer environment for people to buy and sell tickets than other methods. If we can further increase confidence in the service that they can offer, I would hope to see their business flourish and grow.
The Government have been working hard to address the issues in the market. They are not easy issues, and we have been wary of unintended consequences at every turn. We have had to make some very difficult decisions, based on an uncomfortable evidence base. We have given the matter much attention and we now need to reach a conclusion.
The Government have tabled amendments to address some of these issues. The noble Lord, Lord Moynihan, has included our provisions in the most recent draft of his amendment. Our amendments are in two parts. First, we propose a statutory review of the secondary ticketing market. This will be a full review of consumer protection measures in the market. It will be independently led and it will be presented to Parliament. It will start this summer and must report within a year of the start date.
We need time to consult stakeholders and the individual leading the review before deciding on the detailed terms of reference and I know that noble Lords will want to express opinions on the matter. However, I can say that the review will broadly cover the following areas.
First, there will be an assessment of the current law and the changes we are making today. Noble Lords have rightly asked which laws apply to online ticket sales, and how effectively they are enforced. Secondly, it will cover business models in the market. Speakers in our debates have asked whether the market is dominated by consumer sellers or by traders; whether those in the market are seeking profits or mainly seeking to recoup their original costs; and whether national interests are supported. Thirdly, on access to tickets, I fully understand how frustrating it can be for tickets to sell out suspiciously quickly after release. The review will look at this, including the possibility that event organisers might deliberately restrict access to tickets to inflate prices artificially.
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Alongside the review, the government amendments introduce a mandatory reporting requirement on the online ticketing marketplaces. Where they are aware of criminal activity they must report it to the police and
the event organiser. Fraud is an underreported crime, so it is crucial to encourage those who are aware of fraud to report it so that law enforcement can be improved. This is a crucial step in eliminating some of the fraud that the National Fraud Authority found in the online ticketing market. The requirement mirrors regimes such as anti-money laundering rules and product legislation, where those who become aware of an issue must report it to the police and the relevant organiser.
Those are the two elements of the government amendments. I now turn to the amendment of the noble Lord, Lord Moynihan. In general this amendment balances the need to introduce transparency while allowing the secondary market to continue. Let me again stress that we want the secondary market to continue and we accept this amendment on the basis that it allows this. Our original instinct was that this market would flourish best without regulation. However, I have been persuaded to agree to some light-touch regulation.
The amendment of the noble Lord, Lord Moynihan, has two parts. The first part deals with transparency. This clause requires those selling tickets, and the marketplace where the ticket is resold, to provide the buyer with some basic information: the face value of the ticket; the seat number, where applicable; and any restrictions on the person who can use that ticket. Importantly, “buyer” is defined in the amendment as the person who buys the ticket—a change made yesterday by the noble Lord, Lord Moynihan. This will mean that consumers have enough information before they buy to make an informed choice and the right choice for them.
In addition, where the secondary market event organiser or certain other connected person—such as the parent company—is selling the ticket, rather than a simple consumer, they must continue to disclose their status as such.
I should make an important point here. The amendment which the other place rightly rejected included a requirement for individuals to give their name online and provide other unique identifiers, bringing with it the risk of identity theft. These provisions do not appear in the revised amendment of the noble Lord, Lord Moynihan.
As we have discussed at length in the House, transparency in this market could have awkward implications. Some comments made during our discussions have understandably raised concerns that event organisers would use the information provided to cancel tickets which are put up for resale, or blacklist the seller, preventing them from buying tickets in the future. This is definitely not what should happen. Our reading of these provisions, and the basis on which we accept them, is that cancelling tickets and blacklisting sellers is not fair or the right way to treat consumers.
I am therefore very pleased to see safeguards for sellers of tickets that will give consumers confidence to use the market. An event organiser will not be able to cancel a ticket or blacklist a seller merely because a ticket is resold or offered for resale unless there is a term in the original sales contract that allows for this and, more importantly, the term is fair. It is our firm view that terms which prohibit resale are not always
fair and therefore will not be binding on the consumer. This includes terms which seek to prohibit resale at or above a particular price. These too are not always fair and should not be thought of as binding.
I am glad that at the end of the day we have found a compromise in the drafting of this clause. It will allow the secondary ticket market to continue to flourish. Fans who cannot attend an event will be able to resell their tickets. This will ensure that we have a lively and active resale market with numerous sellers competing for buyers, which will help to keep prices down.
There will of course be guidance on the new provision before it comes into force. Let me reassure the House that some guidance already exists and that enforcers are taking action in this sector, using a range of legislation. In that context, I would like to inform the House that the CMA has been conducting work into transparency in the secondary ticketing sector, including into some of the issues covered by these amendments. I am glad to say that it has already secured changes from the largest secondary ticketing platforms and expects to make an announcement in relation to this in the coming weeks.
These amendments address many of the points that your Lordships have raised in this House. Many more such points will be considered in the review. I therefore beg to move.
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