The BOTS Act is not just for bots — at least according to a new ruling that allows legal claims to move forward against a reseller that allegedly used fake Ticketmaster accounts to flip tickets for Taylor Swift’s Eras Tour and other in-demand concerts.
In a Tuesday (April 28) order, obtained by Billboard, a federal judge denied Key Investment Group (KIG)’s motion to dismiss the case brought by the Federal Trade Commission (FTC) last summer. This means the federal agency’s claims can now proceed into evidence discovery and continue toward a possible trial.
The lawsuit alleges that KIG made more than $5.6 million reselling jacked-up concert tickets on the secondary market between 2022 and 2023, including more than $1 million for Swift’s Eras Tour and $20,000 for a single Bruce Springsteen show at MetLife Stadium. The FTC says KIG got around Ticketmaster’s ticket purchase limits by creating thousands of fake accounts powered by IP proxy services and so-called SIM banks — conduct that the agency says violates the 2016 Better Online Ticket Sales (BOTS) Act.
KIG has argued that the case is legally untenable because it never used any bots, which it says is the whole point of the BOTS Act. But in Tuesday’s decision, U.S. District Judge George L. Russell III ruled that despite the clever acronym, “bots” are never actually mentioned in the law that makes it illegal to “circumvent a security measure, access control system or other technological control” put in place by a ticket issuer.
“The statute unambiguously applies to ‘any person’ and not just to ‘bots,” wrote Judge Russell. “Put simply, the court is not persuaded by defendants’ narrow reading of the statute. Further, courts have rejected relying on a statute’s name or acronym as evidence of the law’s plain meaning because it is the statutory language, and not the statutory provision’s title or popular name, that controls.”
The judge was also unconvinced by KIG’s argument that the case should be dismissed because Ticketmaster does not truly enforce its own security protocols. This claim is the subject of a separate BOTS Act lawsuit brought by the FTC against Ticketmaster and its parent company, Live Nation, last year.
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“Whether Ticketmaster condoned or encouraged defendants’ behavior seems, at best, issues of fact best suited for summary judgment briefing and discovery,” Judge Russell wrote. “Defendants may be correct that, ultimately, the FTC will fail to ‘establish’ liability, but that is not the inquiry at this stage of the litigation and the court will decline to dismiss on this basis.”
KIG did emerge with one victory on Tuesday: Judge Russell separately denied the FTC’s motion to dismiss a countersuit brought by the resale company challenging the validity of the agency’s investigation and BOTS Act enforcement. The judge said those claims can move forward toward evidence discovery as well, since KIG “could use a favorable ruling in this case as a defense in the FTC’s lawsuit.”
A rep for the FTC declined to comment on the rulings on Wednesday (April 29). KIG’s lawyers did not immediately return a request for comment.
