On October 20, 2011, the Quebec National Assembly adopted Bill 25, prohibiting merchants from selling tickets at a price above that announced by the authorized vendor. An Act to prohibit the resale of tickets at a price above that authorized by the producer of the event (the "Act"), which will come into effect on June 7, 2012, is a huge blow to many merchants and websites specializing in buying and selling event tickets in Quebec.
No Resale without Authorization
This Act amends the Consumer Protection Act (R.S.Q., chapter P-40.1) by including a new article 236.1, prohibiting merchants from selling tickets to consumers at a price above that announced by the authorized ticket vendor without the prior authorization of the producer of the event.
Further, a merchant who obtains the authorization of the producer of the event must resell the tickets in compliance with the agreement entered into between them and must clearly inform the consumer 1) of the identity of the authorized vendor; 2) of the fact that tickets may be available from the latter; 3) of the advertised price of the tickets; 4) that the ticket is being resold; and 5) where applicable, of the maximum resale price agreed to by the producer of the event.
Tickets Defined Broadly
For the purpose of the Act, a ticket is broadly defined as a document or instrument giving admission to entertainment of any kind and thus encompasses all events for which merchants generally resell tickets at a profit.
Potential Consequence of Violation
The Act makes the practice of reselling tickets without authorization, or in contravention of the various conditions of resale, a prohibited practice under the Consumer Protection Act. As such, in the case of a violation, a merchant may be subject to civil recourses, including cancellation of the sale, reduction of the price paid and even punitive damages. A violation may also open the door to class action lawsuits against merchants who are in contravention of the new provision.
The Consumer Protection Office may even intervene by seeking an injunction to prevent ticket sales which contravene the provision. Further, penal charges may be brought against offenders. If convicted of such an offence, a merchant is liable to a fine of between $2,000 and $100,000.
Not Everyone is subject to this new Prohibition
However, it is important to note that the Consumer Protection Act only applies to those contracts for goods or services entered into between a consumer and a merchant in the course of his business. As such, a transaction for the resale of tickets between a consumer and a person who is not acting for business purposes would not be subject to this provision or the penalties associated therewith.
Correct the Artificial Market Imbalance
According to the government, this amendment will allow consumers to buy event tickets with confidence, knowing the initial price of tickets and knowing that these tickets are still available at the official ticket office. Further, the government believes that the amendment will correct artificial distortions of the market, which it claims were causing harm to artists, event producers and consumers who have a limited budget to spend on cultural and sporting events.
It remains to be seen how this new prohibition will be treated and enforced by both the Consumer Protection Office and the courts, particularly with respect to transactions concluded over the internet where the merchant or consumer is located outside of the province of Quebec. In any event, merchants reselling event tickets should be aware of the risks involved in the unauthorized resale of tickets.