Imagine there was a law on the books in Michigan that made it illegal for you to sell a used car, or that required you to sell that used car only through its original manufacturer. You’d be outraged, and rightfully so.
Well, there is such an outrageous law on the books in Michigan — a law dating back to the 1930s — that restricts the ability of Michigan consumers to resell event tickets they have purchased, and that specifically makes it illegal to sell a ticket for above face value.
Michigan is one of only a handful of states with such a restriction on the resale of tickets. Proponents of the law claim that it functions as a protection for consumers, but it’s actually a protection for teams and venues and a restriction on the freedom of consumers to enter into voluntary transactions with one another.
One effect of the law is to preclude Michiganians from listing their tickets on secondary online exchanges, unless those exchanges have received “authorized dealer” status from the ticket seller. This is like having to sell your used Ford through an authorized Ford dealership instead of being free to sell it to whomever you wish for whatever price you can negotiate. You would see such a law as restraint of trade, and as government protecting entrenched business interests in the name of consumer protection.
And you’d be correct. The law protects the profits of teams and venues that insist that they and only they are allowed to process the transference of tickets — for a fee. It’s the monopoly on ticket transfers that this law protects — not consumers.
Selling items you no longer need or can’t use — such as used cars or used books — is a perfectly natural thing for consumers to do. Economists call these “secondary markets,” and it’s widely understood that secondary markets contribute to economic efficiency and thus accrue to the benefit of us all.
And it’s not as if consumers in most of the other states are crying out for such a law to “protect” them —no, in most other states, consumers enjoy the freedom to sell their unused tickets at whatever price a willing buyer will pay.
Venues argue that their tickets are a license, not property, and that the seller can attach whatever conditions they choose as terms of the license. But arguing that the ticket is a license and not real property doesn’t actually change anything in this argument. It’s just as wrong to use licensing as a means of destroying secondary markets and reducing consumer choice as it is to use some other tool.
More importantly, such licenses are contracts of adhesion, which are defined as contracts in which one side has all the bargaining power and the consumer cannot obtain the good or service without agreeing to all of the terms. Courts frequently refuse to enforce such contracts because the results of contracts of adhesion are often so imbalanced in favor of one party over another that there is a strong implication that it was not freely bargained.
That’s why court decisions, going all the way back to a 1906 California Supreme Court decision and up through 2003’s Arlotta v. Bradley Center, have generally agreed that reselling tickets at a profit is neither illegal nor harmful.
The good news is that Rep. Tim Kelly, R-Saginaw, has introduced legislation to fix this issue. House Bill 5108 would allow fans to buy and sell tickets in person the same as they can do now only through online resale sites, and would allow fans to list tickets on secondary markets other than those “authorized” by the teams and venues. Rep. Kelly’s proposal would allow consumers the freedom to buy and sell tickets in a free-market, without government protecting entrenched monopoly interests.
It’s time to get this unjustified, anti-consumer ticket resale restriction off the books in Michigan.