Agcom fines them regularly, every year for at least 4 years. But the companies do not pay, covered by a regulatory vacuum that has not yet been filled. Effect of an intricate mechanism, which has its roots abroad, between tax havens and nations on which Italian and European law have little power. Huge damage: to the treasury, to music, to spectators. In a previous article, Italian Tech found that, despite sanctions from the Italian authorities, digital scalping companies continue to operate undisturbed. Now we are able to try to shed light on at least some of the causes.
Matter of seconds. To understand what happens when the tickets placed online by the original platforms disappear in a few minutes, you need to look inside that handful of minutes. When thousands, hundreds of thousands of requests come to the sites. And they are hoarding tickets. What happens in those seconds? Where do purchase requests come from? According to several sources close to the investigations conducted in recent years by the Italian authorities 95% of purchases would be made in Russia. Or at least from Russian-speaking nations. Names in the Russian alphabet and not, always fake, with credit cards registered abroad.
Tickets purchased in Russia with foreign credit cards. Then resold on the platforms
It’s not a casuality. Nor a forced hunt for the Russian in times when it is easy to do so. Moscow computer scientists appear to be among the best at this type of operation. Over the years they have specialized in online identity authentication system resale services. According to various reports, there have been groups organized for years to coordinate the purchase and resale of tickets. A practice that would have been consolidated already times of Sochi 2014 Winter Olympics, when Moscow tried to curb the phenomenon with laws and sanctions.
In the case of event tickets bought and resold, it is not only damage to artists and spectators. But also damage to the state. Because the Italian Treasury gets a percentage of the tickets sold on the official platforms. But nothing from resale on secondary ones.
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So if out of a 100 euro ticket, on official platforms the state takes, for example, 10 euro from their resale for 500, 700 euros on the secondary takes nothing.
On average, the resale price of a ticket on Viagogo and similar sites is increased by 400%. The same sources confirm that the percentage that goes to secondary market platforms for the resale of each ticket is 33%. A huge turnover. That if it were only a fifth of the concert market in Italy, it would be around 250 million every year.
However, a Viagogo spokesperson contacted by our publication denies that there may be only Russians behind the resale of tickets: “Our sellers come from all over the world and it is wrong to say that 95% are from Russia. In fact, we have buyers and sellers from over 195 countries”, he says”, and then adds: “The second-hand ticket market offers the opportunity to fill seats that may have remained unused. We’re helping fans get access to see their favorite shows around the world every single day.”
He does not answer the question of how many tickets end up on Viagogo and how many are sold, but points out that ““tickets are placed on Viagogo by different types of sellers. From fans with extra tickets to sports clubs, event promoters and independent places of music and theater. Often these are tickets already available before going online on official platforms, which is why they are also available from us as soon as online “
The fines of AgcoM and Sec, the American Consob
However, that Russian computer scientists may be at the root of these operations is confirmed by several IT security experts. And from the investigations of the Italian and American authorities. Even the SEC, the American Consob, in 2021 he spotted in networks of both people and bots (software that automates actions, in this case purchases) for buying and selling tickets online. But it was a phenomenon already known in the US, which adopted a law in 2016 to prevent online scalping. Also done by American computer scientists, at least at the time.
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“Agcom’s investigation concerns a complex issue regarding the relationship between national and European legislation”, comments the company. “We have provided the competent authorities with all the information requested and we strongly believe in our position. In fact, we have challenged all the fines and most of them have been provisionally suspended by the Council of State based on the validity of our arguments. We will respect the final decision of the courts”, which should arrive next November. Finally an opening to an agreement with Italy: “We believe that Italy is a unique place with regard to cultural events and we are ready to work with the Italian authorities to ensure that we can continue to provide our safe and secure service to Italian consumers”.
Viagogo: “Angry fans? There will always be those who disagree with our market. Let’s fight bots”
The secondary ticketing market has exploded. And with him the ticket prices that are often found en masse on platforms such as Viagogo, taking away the possibility for fans to buy them on the primary market: “We don’t think this bothers people, but there will always be people who disagree with the second-hand ticket market. Millions of fans appreciate the use of our marketplace and the Viagogo guarantee that guarantees access to the event or your money back”.
Viagogo rejects with the accusation of placing tickets bought from bots on the platform. Or rather, he at least says he doesn’t approve of the practice. “Viagogo does not approve of the use of bots to illegally and unfairly purchase tickets at the original point of sale. We strongly oppose the use of bots to buy tickets from primary sellers because it is unfair to fans and puts them at a disadvantage. We support legislation around the world to ban the use of bots and strongly believe that enforcement of these laws – by primary marketers and policy makers – is critical to eradicating bots.”
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Mula: “There is a regulatory vacuum, companies are currently free not to pay”
“The reason why these fines have never been paid is only judicial”, comments to our newspaper Davide Mula, professor of law of new technologies at the European University of Rome, one of the leading experts in the sector. “Agcom fined them, but the sanction is promptly challenged by them before the TAR. The Tar suspends the fine and the payment is blocked. And even after the Tar agreed with Agcom, there was an appeal to the Council of State, which accepted the precautionary request and referred the matter to the Court of Justice”, explains the professor. Basically, even in the face of multimillion-dollar fines (Viagogo alone has them for 40 million) everything stops in front of a regulatory vacuum that puts the Italian authorities with their backs to the wall. Viagogo for example is Swiss. Based in Geneva.
And Swiss companies enjoy some coverage by European rules, which treat services provided by there in some ways as services provided by a member state. But Switzerland is not. “It’s an extremely technical and complicated matter,” continues Mula. “Consequently, all subsequent sanctions were suspended pending the sentence of the Cgue (European Court of Justice, ed) which arrived last April and which proved Agcom right. to the Council of State”.