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Key Investment Group (KIG) is asking a federal judge to throw out a recently filed Federal Trade Commission (FTC) lawsuit against the ticket resale company over alleged violations of the Better Online Ticket Sales (BOTS) Act.
In August, the FTC filed suit against KIG, alleging the company violated the BOTS Act when it purchased thousands of Taylor Swift tickets for her 2023-2024 Eras Tour and resold them for more than $1 million in profit. The lawsuit was filed days before a similar complaint was filed against Ticketmaster for allegedly refusing to enforce its own rules against scalpers and allowing unrestricted resale on its platform. Since then, Ticketmaster has made changes to its resale policies and, like KIG, has argued that the FTC is misapplying the BOTS Act.
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The FTC sued KIG in August, alleging the Colorado-based ticket resale operation used networks of accounts, IP masking, SIM boxes and other technical tools to evade Ticketmaster’s ticket-purchasing limits and acquire hundreds of high-demand tickets for resale. The agency claims these tactics “circumvented” the ticketing giant’s security controls in violation of the BOTS Act.
KIG is the first of the two firms to file a motion to dismiss. In a sweeping 36-page missive filed on Nov. 24, KIG attorney Bezalel A. Stern with law firm Manatt, Phelps and Phillips argues that the FTC’s complaint attempts to regulate long-established broker practices — like using multiple IP addresses to buy tickets or operating dozens of Ticketmaster accounts — that do not involve bots.
“KIG does not use bots. KIG does not circumvent any security measure,” the company tells the court, arguing the FTC is attempting to impose an unprecedented interpretation of the law that contradicts the law’s legislative history and the FTC’s own prior guidance.
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Stern stresses that the BOTS Act was explicitly drafted to stop “malicious computer code” that lets bot operators overwhelm ticketing websites and jump ahead of human buyers. KIG argues that since it employs human buyers — not automated scripts — the law does not apply. “Without the use of bots, there can be no BOTS Act violation,” KIG claims in the filing.
KIG’s brief also turns the FTC’s own evidence against it. In its lawsuit, the FTC included Ticketmaster records showing the ticketing company tracked KIG’s accounts and purchasing practices — even those created under alternate names — and knowingly allowed them. In a 2024 Ticketmaster email cited by the FTC, a Ticketmaster representative tells KIG that purchases made across different accounts are “within guidelines” so long as each individual account respects the posted per-account ticket limit. KIG’s motion argues that email destroys the FTC’s theory of unlawful “circumvention,” because ticket brokers at KIG cannot “avoid,” “evade” or “deceive” Ticketmaster’s controls when Ticketmaster explicitly authorizes the behavior.
KIG also highlights a contradiction between the FTC’s case against it and the agency’s separate September lawsuit against Ticketmaster and Live Nation. In that parallel case, the FTC alleges the ticketing company “knowingly allows, and in fact encourages, brokers to use multiple Ticketmaster accounts.” KIG argues the FTC cannot simultaneously claim Ticketmaster encourages multi-account purchasing while accusing KIG of “circumventing” the very same rules.
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The filing emphasizes that the FTC never alleges that KIG purchased tickets “within seconds” or at speeds indicative of automated software — the hallmark of bot activity described in past enforcement cases. According to KIG, the FTC is trying to convert everyday reseller practices into federal violations simply because they involve scale.
The FTC’s cited evidence — including a bank audit, news reports and previous consent decrees involving actual bot operators — does not establish that KIG knew its conduct was illegal under the BOTS Act, KIG’s motion claims.
Elsewhere in the motion, KIG alleges that the case began with a politically charged push by the White House to crack down on scalping. The company notes that minutes after President Trump — joined by Kid Rock — signed a March 2025 executive order demanding aggressive enforcement of the BOTS Act, the FTC sent KIG a draft complaint threatening litigation unless the company admitted wrongdoing.
KIG says the agency is now “expanding the BOTS Act far beyond its written and intended scope,” and warns that if the FTC’s theory were adopted, “every person or company who purchases tickets using more than one account” could be accused of violating federal law.
U.S. District Judge George L. Russell III will now consider the motion and whether to dismiss the government’s case before discovery begins. If not, the FTC will proceed to try to prove that KIG’s coordinated multi-account strategy amounted to illegal bot-level activity.
Senators Marsha Blackburn (R-Tenn.) and Ben Ray Luján (D-N.M.) asked the Federal Trade Commission to investigate Spotify on Friday (June 20). In a letter to FTC Chairman Andrew Ferguson obtained by Billboard, the senators accused the streamer of converting “all of its premium music subscribers into different — and ultimately higher-priced — bundled subscriptions without […]
The Department of Justice (DOJ) and the Federal Trade Commission (FTC) have launched an official inquiry into the event ticketing business at the urging of President Donald Trump, the agencies announced Wednesday (May 7).
As part of the inquiry, “the agencies invite members of the public to submit comments and information on harmful practices and on potential regulation or legislation to protect consumers in the industry,” according to a press release. Anyone “impacted by anticompetitive practices in the live concert and entertainment industry” will have 60 days to submit comments to Regulations.gov, with the comment period concluding on July 7.
After the comment period closes, the agencies state they will “use the information in their preparation of the report and recommendations directed by President Trump” in his Executive Order 14254, also known as Combating Unfair Practices in the Live Entertainment Market. Signed by the president during a March 31 meeting in the Oval Office with musician Kid Rock in attendance, the order directed the Attorney General, along with the Secretary of the Treasury and the chairman of the FTC, to submit a report identifying “recommendations for regulations or legislation necessary to protect consumers” in the industry, including by enforcing the Better Online Tickets Sales (BOTS) Act.
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Passed in 2016, the BOTS Act gives both the DOJ and the FTC broad power to crack down on scalpers who illegally use automated technology to skirt the restrictions placed on high-demand ticket sales and prevents scalpers from buying up the best seats to flip for profit. Yet since its passage in 2016, the BOTS Act has only been used once to prosecute scalpers who knowingly break the rules put in place to make ticket buying fairer and more equitable.
“Competitive live entertainment markets should deliver value to artists and fans alike,” said Assistant Attorney General Abigail Slater of the DOJ’s Antitrust Division in a statement. “We will continue to closely examine this market and look for opportunities where vigorous enforcement of the antitrust laws can lead to increased competition that makes tickets more affordable for fans while offering fairer compensation for artists.”
Added FTC Chairman Andrew N. Ferguson, “Many Americans feel like they are being priced out of live entertainment by scalpers, bots, and other unfair and deceptive practices. Now their voices are being heard. President Trump has sent a clear message that bad actors who exploit fans and distort the marketplace will not be tolerated. The FTC is proud to help deliver on that promise and restore fair and competitive markets that benefit ordinary Americans.”
The inquiry comes as several ticketing bills work their way through Congress, most notably the TICKET ACT, which passed the House of Representatives on April 29 and also includes language calling for the enforcement of BOTS Act.
“Illegal bot use runs rampant in the ticketing industry because the FTC has only brought one enforcement action since the use of bots was banned in 2016,” read a statement from Stephen Parker, executive director of National Independent Venue Association (NIVA), shortly after the April 29 passage of the TICKET ACT in the House. He added, “We hope Congress does not miss the opportunity to ensure these laws are actually enforced in the future.”
The Federal Trade Commission is being urged to investigate technology companies that create tools for ticket scalpers that violate existing laws and drive up the price of concert tickets.
The warning and call to action comes by way of a letter signed by National Independent Talent Organizations president Jack Randall and executive director Nathaniel Marro, taking aim at the World Ticket Summit. Held in Nashville earlier this month, the annual conference is organized by the National Association of Ticket Brokers, the country’s largest member organization for professional ticket resellers and individuals who list and resell tickets on sites like StubHub and SeatGeek.
At this year’s summit, members of NITO – which represent independent talent agencies and management companies including Arrival Artists, High Road Touring, Paladin Artists, Q Prime, Red Light Management and TKO – “observed a sold-out exhibition hall filled with vendors selling and marketing products designed to bypass security measures for ticket purchases, in direct violation of the BOTS Act,” a Sept. 9 letter to Federal Trade Commission chair Lina Khan reads.
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That technology includes web browser extensions that set up multiple tabs masking a user’s IP address, proxy services that allow users to be logged in to multiple ticketing accounts from one location and virtual credit card services that bypass geographical restrictions on ticket sales, which are often put in place by event organizers to ensure fair access for local fans.
According to the letter, the use of this type of technology to procure concert tickets is a violation of the Better Online Ticket Sales (BOTS) Act of 2016 which prohibits scalpers from using technology that circumvents “a security measure, access control system, or other technological measure used to enforce ticket purchasing limits for events with over 200 attendees.”
Put more simply, most ticketing companies place a cap on how many tickets a fan can buy for a concert and the use of automated bots, proxy servers, VPNs and phantom credit cards to exceed purchase limits is a violation of the BOTS Act.
“The presence of these vendors at a conference specifically for ticket brokers strongly suggests that a substantial portion of attendees either currently use these services or are likely to do so in the near future,” the letter reads. “This widespread availability and apparent demand for tools that can circumvent ticket purchasing limits indicates that many, if not most, scalpers are operating in violation of the federal BOTS Act.”
The NATB’s executive director Gary Adler issued a lengthy statement in response to NITO’s letter, writing “The vast majority of technology exhibitors at the conference were inventory management systems that help ticket companies organize their tickets, offer them for resale, and help with pricing.”
“There are many friction points in ticketing,” Adler continued “and high-tech ways that players in the system try to monopolize every dollar spent on ticketing and to prevent the resale of tickets. For more than half of events there are lower cost options on the secondary market and some in the primary market don’t like seeing their previously sold tickets being offered for resale at deep discounts. Artists, venues, and primary ticketers abuse technology every day to create fake scarcity and deceive consumers into paying higher prices when really, they are secretly holding back tickets to slowly drip more on sale over time to cheat and fool the fan. This is most likely an illegal deceptive marketing and advertising practice, driven by artists, venues, and primary ticketing companies, that the FTC should immediately investigate.”
Adler notes that the NATB “advocated for the passage of the BOTS Act in 2016 as we fully support the banning of bots. There is no place in the system for illegal bot use. We stand for doing resale the right way and passing strong laws to protect fans and competition across the ticketing industry. If any exhibitors were offering technology that violates the BOTS Act, we want to know as they will not be welcomed back.”
Since its passage in 2017, the BOTs Act has only been enforced one time, in 2021, when three New York-based ticket brokers were charged with violating the law. The government’s enforcement of the BOTS Act has been an “abysmal failure” writes songwriter and music industry analyst Chris Castle, noting that StubHub’s scheduled IPO this fall was a tell-tale sign that the BOTS Act was “under-enforced.”
“Let’s face it – if there were no bots and no boiler room operations, StubHub probably wouldn’t have much of a business,” Castle wrote. Lawmakers including Sen. Marsha Blackburn (R-Tenn.) have introduced legislation like the Mitigating Automated Internet Networks for (MAIN) Event Ticketing Act of 2023 which would force ticketing companies to be more proactive about reporting BOT usage, but those efforts have largely stalled in Congress.
NITO’s letter includes eight recommendations for rights holders and the FTC, calling for the regulator to subpoena the customer lists of “companies offering services that fall into the categories likely to facilitate BOTS Act violations” as well as increased enforcement actions, prioritizing “investigations into large-scale ticket reselling operations, focusing on those using multiple technologies to circumvent purchasing limits.”
By implementing these recommendations, the letter explains, “rights holders and the FTC can take significant steps towards curbing BOTS Act violations and ensuring fairer access to event tickets for consumers.”
The Federal Trade Commission on Wednesday proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills. President Joe Biden has made the removal of these fees a priority of his administration. The Democrat’s effort has led to a legislative push […]
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