September 10, 2018

S. Windsor ticket resellers sue NY for pushback of biz practices

Two South Windsor-based event ticketing companies have each filed lawsuits against New York's attorney general to prevent the state from suing them over alleged fraudulent ticket sales.

TicketNetwork Inc., which operates a website for ticket resales, and Ticket Galaxy, a ticket reseller, said they each filed lawsuits in New York Supreme Court against Attorney General Barbara Underwood for the court to affirm its ticket sales are lawful.

The lawsuits, filed Thursday, come more than two years after the New York attorney general's office said a multi-year probe uncovered the online marketplaces defraud consumers by selling tickets not yet in inventory. Underwood has asked the companies to pay millions of dollars in penalties to avoid a lawsuit.

TicketNetwork argues it is not responsible for third-party ticket sales on its website, even if sellers offer tickets they do not yet own. The company says there is no legal precedent for this allegation under state or federal law made by the attorney general's office.

The companies said they are protected under the federal Communications Decency Act (CDA) of 1996, which says providers of online sales are not responsible for the actions of independent sellers and buyers that use its web marketplace. Amazon and eBay, the company says, are also protected under CDA.

After talks with Underwood's office "reached an impasse," TicketNetwork Chief Operating Officer Mike Honeyman said they were forced to seek declaratory judgments from the state's Supreme Court confirming they operate legally.

"Online commerce would be severely negatively impacted, and consumers would see a decrease in competition and an increase in costs if the protections afforded to online marketplaces such as Amazon, eBay and innumerable others were selectively ignored," Honeyman said.

Amy Spitalnick, a spokeswoman for the attorney general, said Underwood remains committed to holding the ticket resellers accountable for misleading consumers.

"Speculative tickets harm both consumers and the industry as a whole -- driving up ticket prices and defrauding consumers by leading them to believe they are buying an actual ticket, rather than making a bet on the seller's ability to deliver the ticket for which they paid," Spitalnick said. "We will respond to this baseless lawsuit in court, and will not be deterred in our efforts to protect New York fans."

Underwood's predecesor Eric Schneiderman began the state's probe several years ago, but resigned as attorney general in May after four women accused him of physically abusing them, The New Yorker reported. Schneiderman has denied the allegations.

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