Secondary ticketing and hosting providers: the Italian Viagogo case

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On June 25, 2019, the Italian Supreme Administrative Court ruled on the decision issued by the National Competition and Consumer Authority (Autorità Garante della Concorrenza e del Mercato, “AGCM”) against the secondary ticketing provider Viagogo in 2017[1].In essence, the Court stated that a passive hosting provider, such as the secondary marketplace Viagogo, cannot be requested to provide the consumers with information held by the sellers operating through the platform.

The ruling represents the outcome of a proceeding initiated by AGCM in 2016 on alleged breaches of the Italian Consumer Code, relating in particular to the insufficient or deceptive information provided by Viagogo on its website.

 

Italian initiatives into the online ticketing sector

The ruling at hand is part of a much broader investigation conducted by AGCM against illegal online ticketing, which has involved several companies operating in both the primary and secondary markets.

On April 5, 2017, by Resolution n. 26535, AGCM found Viagogo in violation of Articles 20, 21 and 22 of the Italian Consumer Code for unfair commercial practices to the detriment of the Italian consumers. According to the Authority, Viagogo did not display on its website important information on the secondary nature of the transactions performed by the resellers through the marketplace, as well as on the face value, location and other restrictions of use of the tickets.

On the same day, the Authority closed proceedings also against other ticketing providers Ticketbis, Mywayticket, Seatwave and Ticketone.

As regard to the practices put in place by Ticketbis, Mywayticket and Seatwave, AGCM found that they did not publish clear and precise information either with respect to the nature of their activity, or the characteristics of the tickets offered.

With regard to primary market operator Ticketone, AGCM found that it allegedly failed to adopt measures to: prevent the purchase of tickets by means of automated means; limit multiple purchases; and carry out ex post controls on the tickets sale. The Authority considered these behaviors to be contrary to the Italian Consumer Code and imposed a €1 million fine to Ticketone (annulled in first instance and currently under appeal before the Supreme Administrative Court)[2].

 

AGCM findings against Viagogo

In the 2017 Resolution against Viagogo, AGCM pointed out the lack of clear and precise information on the platform’s website on the activity carried out by Viagogo stating in particular that:

i) when a consumer looked for a ticket of a certain event on a search engine, one of the first results to appear was the one containing the label “Viagogo Official WebsiteTM”. This phrasing was, according to the Authority, likely to cause confusion in the consumer believing to purchase from the official seller;

ii) the site clearly displayed only the price proposed by the reseller on Viagogo, while the original price remained unclear;

iii) the information about the seat location was missing;

iv) on the website were displayed messages which misled the consumer as to the actual number of tickets left, thus rushing him into making a buying decision;

v) the information provided made difficult for the consumer to understand the global price of the ticket: in fact, the indications concerning VAT and shipping costs were displayed only at an advanced stage of the purchasing process.

AGCM rejected Viagogo’s argument that, as a passive hosting provider within the meaning of the e-Commerce Directive 2000/31/EC, it was not liable for the activities of the vendors or for not having checked the sellers’ information in advance.

In light of the duration of the conducts (initiated in May 2016 and still ongoing at the time of AGCM’s decision in 2017), the Authority ordered Viagogo to stop the illegal practices and pay an administrative fine of €300,000.00[3].

The Supreme Administrative Court ruling

Viagogo brought a claim against the 2017 AGCM’s decision, which was finally annulled by the Supreme Administrative Court stating that:

i) the use of the expression “Official Website” is legitimate, since it refers to the intermediary activity officially carried out by Viagogo, and not to the activity of the first seller on the primary market;

ii) Viagogo operates as a passive hosting provider, as defined by European case law[4]. In general, hosting providers are bound by the Consumer Code as far as the rules on unfair practices against consumers are concerned. However, the implementation of such rules cannot transform a passive hosting provider into an active one. For this reason, the Supreme Court upheld Viagogo’s appeal and annulled the AGCM’s decision, stating that the Authority’s prescriptions would have changed Viagogo into an active hosting provider by means of the obligation to publish the ticket face value and the seat location: these elements are available to the seller and cannot be published and controlled by the passive hosting provider without affecting its very nature and related responsibility.

The judgment at hand recalls another recent decision of the Italian Court of Cassation[5] that recognised for the first time in Italy the difference between active and passive hosting providers, also providing so-called “interference indices” which rule out the passive nature of a provider. Specifically, a hosting provider is active when it carries out one or more of the following operations: the activities of filtering, selection, indexing, organization, cataloging, aggregation, evaluation, use, modification, extraction or promotion of content, carried out through an entrepreneurial management of the service, as well as the adoption of a technique for evaluating users’ behaviour to increase their loyalty. In essence, these conducts have been considered to be significant by the Court since they have the effect of completing and enriching in a non-passive way the use of content by the final consumers.

 

[1] Consiglio di Stato, judgment No 04359/2019.

[2]Moreover, to fight against illegal practices in the online ticketing sector, in December  2016 the Italian Parliament passed a law to prevent the phenomenon of online ticket touting (Law 11 December 2016, No 232, Article  1, paras. 545 – 546), which as of January 1, 2017 punishes the illegal resell of tickets.

[3] The fine was determined in a range from €5,000.00 to €5,000,000.00 according to Article 27 of the Italian Consumer Code. In a further proceedings in 2018, Viagogo was fined €1 million for not having complained with the 2017 Resolution.

[4] CJEU, C-324/09, L’Oréal v. eBay; CJEU, C-236/08, Google France v. Louis Vuitton; C-434/15, Asociación Profesional Elite Taxi.

[5] RTI v. Yahoo!, March 19, 2019, No 7708. In this respect see: F. Frigerio, Responsabilità dell’hosting provider: la Cassazione conferma la distinzione tra attivo e passivo, in Diritto (d)e(i) Nuovi Media, April 18, 2019; RTI v. Dailymotion: il Tribunale di Roma interviene nuovamente sulla responsabilità dell’hosting provider sulla scia della sentenza della Cassazione nel caso RTI v. Yahoo!, in Diritto (d)e(i) Nuovi Media, September 4, 2019.

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