TicketNetwork Seeks Declaratory Judgment Regarding Business Model

SOUTH WINDSOR, Conn., Sept. 6, 2018 /PRNewswire/ -- TicketNetwork, Inc. ("TicketNetwork" or "the Company"), a leading online marketplace for live event ticket resale, today announced that it has sought the protection of the Supreme Court of the State of New York in response to New York Attorney General's ("the NYAG") demands that the Company pay millions of dollars to avoid facing a civil action based on the NYAG's incorrect interpretation of state and federal law.

TicketNetwork has cooperated fully with the NYAG's investigation of its business for more than two years, producing countless documents and participating in innumerable phone calls, in-person meetings and written communications. However, TicketNetwork and the NYAG have reached an impasse. Through this lawsuit, the Company is seeking the Court's conclusive affirmance for its position that it operates in full compliance with all applicable regulations and that the NYAG has no basis to allege that the Company's practices violate any state or federal law.

TicketNetwork is an internet marketplace that connects independent ticket sellers with independent ticket buyers. All tickets offered for sale on TicketNetwork are procured and offered by third-party ticket sellers. TicketNetwork itself has no ticket inventory. The NYAG seeks to hold TicketNetwork responsible for sales occurring in its marketplace. According to the NYAG's assertions, any time a seller offers a ticket for sale that the seller does not yet own, but will procure after an order is placed, the seller has automatically committed a fraudulent and unlawful act, and TicketNetwork is allegedly responsible for this purportedly illegal conduct because it provides a marketplace through which such ticket offers are made.

However, there is no legal precedent for this allegation under state or federal law. TicketNetwork believes the sales practices at issue are completely lawful.

First, TicketNetwork is actually protected by the federal Communications Decency Act of 1996 ("the CDA,") which directs that providers of online interactive services are not responsible for the conduct of the independent sellers and buyers that use their web-based marketplaces. This is the same law that protects all online marketplaces, including eBay, Amazon, and countless others. One court has previously affirmed TicketNetwork's federal protection as an online marketplace, and the NYAG can cite to no court decision to suggest any different result now.  The case is Anne Milgram, Attorney General of the State of New Jersey, and David Szuchman, Director of the New Jersey Division of Consumer Affairs v. Orbitz Worldwide, Inc., TripNetwork, Inc., and TicketNetwork, Inc., 16 A.3d 1113 (New Jersey Superior Court 2010).

Secondly, Governor Andrew Cuomo recently signed into law a bill that confirms this practice is lawful in New York. Under this law, ticket sellers are allowed to list tickets before they have purchased them, provided that they disclose certain information about the tickets.

Finally, New York's own Department of Taxation and Finance has issued guidance on the sales tax treatment of these types of sales. In short, if the NYAG's view were correct, it would conflict with both state and federal law.

TicketNetwork Chief Operating Officer, Mike Honeyman, said: "We have been forced to seek Court protection in response to the New York Attorney General's baseless claims and threats against TicketNetwork. The NYAG knows full well that we have immunity under the Communications Decency Act of 1996 and that New York state laws and administrative guidance permit these types of sales. Despite that, the NYAG appears intent to press on with this course of action. Online commerce would be severely negatively impacted, and consumers would see a decrease in competition and an increase in costs if the protections afforded to online marketplaces such as Amazon, eBay and innumerable others were selectively ignored. We are asking the Court to reaffirm that online marketplaces are protected under federal law, as it is apparent that the NYAG's Office needs a reminder of this longstanding principle.  In addition, given the recently enacted New York law, we are confident the Court will determine that we are in full compliance with the law."

TicketNetwork noted that in a separate action today, Ticket Galaxy, an affiliated company and leading secondary market ticket distributor, also filed its own lawsuit for declaratory judgment against the NYAG.

About TicketNetwork
Founded in 2002, TicketNetwork is a high-tech leader providing software solutions for the secondary ticketing market. The Company's innovative technology solutions enable independent buyers and sellers to exchange over $5.5 billion in live event ticket inventory for over 100,000 concerts, sports and theater events around the globe. TicketNetwork is Payment Card Industry (PCI) certified and offers a 100% money-back guarantee to its retail customers.

Contacts
Ashe Reardon / Hillary Profita
Kekst
[email protected] / [email protected]
212-521-4809 / 212-521-4825

SOURCE TicketNetwork, Inc.