Canadian Heritage Committee on May 7th, 2019

[Philip Vanden Brande]

No.

[Pierre Breton, Liberal, Shefford, QC]

Okay.

Tickets are purchased directly through you. People have to know exactly what they want. They go on the evenko website or the Festival international de jazz de Montréal website and, if I understand correctly, they are directed to the evenko site or, at least, to your platform. So people buy directly from you.

Is that right?

I am trying to understand.

[Evelyne Langlois-Paquette, Manager, Governmental Affairs, evenko, L'Équipe Spectra]

I would like to make a quick comment about the jazz festival and other Spectra festivals.

We deal with various ticketing platforms, as we do not have our own box office. We deal with official platforms. We cannot at all control the resale aspect.

[Pierre Breton, Liberal, Shefford, QC]

Which companies are those?

They are not companies you control, but other partners or suppliers.

[Philip Vanden Brande]

Exactly.

To give you an example, Place Bell, in Laval, deals with Ticketmaster. We work with those kinds of platforms for all of our properties.

As Ms. Langlois-Paquette was saying, as part of the jazz festival, for example, many of our tickets are for sale in various performance halls. We work with performance hall box offices, which are associated with various official ticketing partners.

[Pierre Breton, Liberal, Shefford, QC]

I'm sorry, but I am a bit new to this. So if I understand correctly, Ticketmaster is a competitor of StubHub, for example.

[Philip Vanden Brande]

No, it's an official vendor.

[Pierre Breton, Liberal, Shefford, QC]

It is an official vendor. Okay, that's different.

My next question can be for the StubHub representatives.

Could you deal with Spectra directly for resales, or do you have to deal with Ticketmaster in that context? Mr. Nowosad and Ms. Dooley, can you answer that question?

[Paul Nowosad]

The opportunity to work directly with any artist, venue or promoter such as evenko, or with any other, is something our business is doing globally, in many instances. It's up to them to choose who they would like to use as a channel to distribute and provide access to fans for their events.

[Laura Dooley]

I would add that while Ticketmaster is predominantly a primary ticket seller, meaning they're selling the first sale of tickets, they also have many offerings in the secondary market in which we directly compete with them. For example, they have a TM+ platform on which they sell resale tickets that can be sold either by professional resellers or by consumers through their initial offering. They also have interests in or own the NHL TicketExchange and the NBA ticket exchange, which are secondary platforms that directly compete with StubHub.com.

[Paul Nowosad]

I think you'll see from the comments we made that the marketplaces are blending faster than many of us are aware. Therefore, the transferability and the openness and transparency are vital, I think, to both sides.

[Pierre Breton, Liberal, Shefford, QC]

You said that StubHub came on the market in 2000. I assume you were probably among the first in this area. Since your arrival, who has benefited from those changes and who has been disadvantaged by them?

[Laura Dooley]

From an advantage standpoint, the value proposition StubHub has been able to bring to the secondary market is to insert consumer protections into ticket resales. Whereas traditionally ticket resales were often done on street corners, in front of venues and whatnot, StubHub intermediates the buy and sell process and offers to our sellers and to our buyers a level of customer protection that was not available before.

For example, if you transact on our site, we have 100-plus staff who work on our trust and safety team to verify the validity of those tickets and to intermediate the payment between the buyer and seller in order to ensure that in the very rare instances that something goes wrong with our transaction or a ticket is sold that is not valid, we're able to stop the payment to the seller, discourage that type of activity and make the buyer whole—to refund them the money inclusive of fees that they spent.

StubHub actually goes above and beyond most of the industry, in the sense that our first recourse is not a refund. Our first recourse will be to try to source a ticket for that seller to make sure they get to experience the events they want to experience. Our customer service program was actually named by Newsweek in 2019 as the best customer service program for all of the ticketing market in the U.S. It's something we take very seriously. We're very proud of it and we believe it's why we've earned the trust of fans in this market.

[Pierre Breton, Liberal, Shefford, QC]

Thank you.

[The Chair, Liberal, Julie Dabrusin]

Thank you, Mr. Breton.

We now go to Mr. Yurdiga for five minutes.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Madam Chair.

Welcome to our committee. There have been very interesting questions, and many of the best questions have already been asked. Mine is going to be quite simple.

We have talked much about bots and have talked some about fraud. In reality, who is responsible for what?

I understand fraud. It's a government issue. On the bot issue, is the industry going to take the lead and let us worry about the fraudulent cases? It's against the law; it's a criminal offence.

From your perspective, Madam Dooley, do you think we should leave things alone or ensure that governments force law enforcement to actually take a more active role in prosecuting some of these fraudulent sites?

[Laura Dooley]

It's a collaboration and needs to be a collaboration in order to work well. In the last panel we heard a lot about how we can best enforce the bots laws. The fact of the matter is that the governments charged with enforcing those laws don't have the information they need in order to prosecute the bad actors.

The sites that are being attacked by bots are primary ticket sellers. StubHub is attacked by bots as well. We do our own part to try to shut down that activity. It's incumbent upon all of us, however, to collaborate with government to say, here's the information you need to go after bad actors.

Certainly there are some jurisdictional issues involved. Where are these bad actors located? When the harm is attacking Canadian consumers in whatever province they live in, however, there's an opportunity for enforcers to go after those bad actors wherever they live.

StubHub regularly collaborates with law enforcement when we detect fraud on our site, whether it be payment fraud or just fraudulent activity in general. It's a commitment we make across the entire eBay business. It's something we pride ourselves on and it's something I think we can encourage the rest of the industry to do.

Certainly there's a major responsibility from a technological standpoint. As StubHub, not necessarily in Canada but in other markets, is entering into the primary space, we're investing significant resources into learning how we can combat fraud attacks on our site as well.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

From our perspective, there's legislation. That's fine, but enforcement sometimes is lacking. We have a lot of laws on the books that can deal with many of these issues, and there's always a disconnect between legislation and enforcement. I think we have laws currently in place that can deal with much of this, but there needs to be an investment on the enforcement side. We see this throughout all sectors. Whatever industry it is, there are problems.

I'm curious about how much money is spent on actively preventing bots from getting into your organization. Is it a very expensive venture to ensure that the tickets going for resale are not actually obtained through bots?

[Laura Dooley]

I don't have a number on that.

[Paul Nowosad]

Yes, I don't think we have a number. I could tell you that it is a significant investment at eBay across all of its portfolio companies, including StubHub as well as the classified businesses.

It's something we take very seriously, both building a relationship with law enforcement across this country and in any other country in which we operate and providing the best technical remedies we can—or preventions. It is tough, as somebody mentioned earlier, to stay one step ahead but I think being vigilant.... There is nothing to lose from all players in this space working together. We're all trying to seek the same remedy, which is to ensure the quality of tickets in the hands of the fans who actually want to attend the events.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Once you find out that a group or individual has been using bots to obtain a ticket, what is the process? Do you just block them, or do you go a step further and actually report this group or individual to law enforcement? From your perspective, what are you doing to combat this?

[Paul Nowosad]

There are usually two different layers. One is, for most companies in this industry, especially ours, putting in a layer of technology to prevent the inbound activity of foreign technology—or bots, if you will. That's one step.

The second is working with law enforcement when somebody has been disenfranchised from a purchase or sale or access point and seeing whether we can be a source of information to help remedy the situation. From time to time we can and sometimes we cannot, but we are always open to a dialogue and to providing the best efforts of disclosure we can within the confines of the law.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Have you reported something and gotten to a level where there was actually a prosecution and people went to jail or were fined? Have you ever experienced that, or am I just being hopeful that something will happen?

[Laura Dooley]

It's difficult to say in the context of bots. We've certainly been involved in enforcement actions that are related to bots, but in that activity, our partnership with law enforcement extends well beyond just the use of bots to procure tickets. We work very actively, for example, in the payment fraud industry. The use of fraudulent credit cards, for example, to try to purchase tickets on our site is something that happens quite often. That's information we share very readily with law enforcement.

I think, though, that for better or for worse, it is circumstantial. Often it's not a high enough activity level or monetary value to warrant or justify law enforcement's taking the time to do further investigation. It is, however, something we readily offer when asked, and certainly often without being asked as well.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Thank you so much.