April 20, 2007 11:12 AM PDT
Ticketmaster sues eBay's StubHub over sales tactics
In a complaint filed Wednesday in Los Angeles County Superior Court, the West Hollywood, Calif.-based company claims StubHub has been interfering with its agreements with clients, which typically grant Ticketmaster exclusive rights to sell tickets for events to the general public and "generally" bar it from using the services of other ticketing companies.
StubHub was aware that Ticketmaster had such a deal with the Rowdy Frynds Tour but proceeded to indirectly or directly acquire tickets for those shows anyway and to market itself as the "official" provider of premium seats, according to the court filing by Ticketmaster, which is owned by IAC/InterActiveCorp.
Although the complaint focuses on the Rowdy Frynds tour, it claims StubHub has repeatedly sought to interfere in Ticketmaster contracts over the past two years as "part of a larger scheme to diminish Ticketmaster's role in the sale of tickets generally" and to sully Ticketmaster's reputation as a provider of the "best seats available."
StubHub, for its part, denied any wrongdoing. "StubHub believes the lawsuit filed by Ticketmaster is without merit and intends to vigorously defend itself against these unsubstantiated claims," spokesman Sean Pate said Friday.
Vector Management, the company that organized the tour, declined to comment on the suit.
StubHub, which eBay acquired earlier this year for $310 million in cash, bills itself as an online marketplace where music and sports fans can buy and sell tickets at "fair market value." The company announced in a press release last month that thanks to a "special partnership" with the Rowdy Frynds tour, which features Lynyrd Skynrd and Hank Williams Jr., it would be offering front-row seats through an "exclusive auction" and up to 100 seats in the first 10 rows for all 20 show dates.
According to Ticketmaster's complaint, Stubhub used "improper" tactics to steal away seats that should have been in Ticketmaster's inventory. Sometimes StubHub acquired the tickets by negotiating deals with artists for tickets, and at other times its representatives threatened venues that they would "not be chosen to host future events" unless they sold StubHub a certain number of premium seats, the complaint said.
Ticketmaster has asked that StubHub be ordered to pay back all of the money it has acquired through the allegedly "unlawful and improper business practices," along with punitive damages and a permanent injunction barring future improper sales. The complaint did not mention how many tickets were at stake.
The latest lawsuit appears to reflect the ticket titan's mounting frustration with secondary sellers it claims are interfering with the exclusive business deals it brokers with event venues.
Earlier this week, Ticketmaster also filed four separate suits in federal court in California. They target RMG Technologies, a company that allegedly makes software that allows users to grab large chunks of seats to be resold at a profit, and a number of individuals who allegedly employed bots and automated devices to access Ticketmaster servers in violation of the company's terms of service and federal computer crime laws.
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