In another report stemming from the Paradise Papers leak, apparently the CBC and the Toronto Star have uncovered evidence of a multi-million dollar ticket scalping operation that StubHub, the online ticket exchange service, not only permits but encourages. Following the investigation, the platform’s UK offices have been raided by authorities.
Though the name Julien Lavallée may not ring a bell, for most people, he is quite the mastermind behind the enormous operation. The CBC reported that Lavallée’s finances appear in the documents with further research showing that he runs it from his home base in Quebec. According to the news outlet’s analysis, the business appears to use a massive array of bots that rapidly snatch up tickets to events around the world to sell them on StubHub.
In one example of the scale of Lavallée’s enterprise, the CBC analyzed sales records for three Adele concerts in the UK. Lavallée’s name and those of his friends and family members reportedly appear hundreds of times, connected to ticket sales in cities around the world. The face value of the 310 tickets, purchased from 12 different locations, came out to a whopping $52,000. The CBC says those purchases only took 25 minutes to complete.
Though ticket scalping isn’t inherently illegal in the United States, the “Better Online Ticket Sales Act of 2016” made it illegal nationwide to use bots to purchase tickets rapidly. Though StubHub has a disclaimer requiring users to “follow all relevant laws,” the existence of a password-protected Top Seller portal shows that the company in fact rewards scalpers who could only sell the amount they do with the use of bots.
According to StubHub’s Top Seller Handbook, a high-volume reseller who is invited into the program can receive significant discounts on the 10 percent fee that StubHub applies to transactions. Gross ticket sales of between $250,000 and $5 million entitle participants to increasingly greater reductions of StubHub’s commission. StubHub even said Lavallée was “one of their biggest global resellers.”
Though StubHub said that it “agrees that the use of bots to procure tickets is unfair and anti-consumer,” it seems as though the UK’s Competition and Markets Authority had their suspicions. StubHub and three other online ticket retailers were targeted in a crackdown that’s part of a year-long investigation into the industry’s practices. According to The Guardian, officials “are understood to have seized data relating to StubHub’s ‘top seller’ programme, which manages its relationships with industrial-scale ticket touts selling tickets at vast mark-ups.”
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