'Should this ticket be re-sold for profit it will be cancelled and the holder will be refused entry. This condition specifically prohibits ticket re-sale through online market or auction sites.' (condition 6)

Creative acknowledged that it could not trace every ticket nor could it determine whether a purchaser had complied with condition 6. However it argued that ticket holders would have understood that cancellation would only be possible if, first, Creative discovered that resale for a profit had occurred and, secondly, that the resale was by an original purchaser (not by a subsequent acquirer of a ticket who was not bound by the condition).

BDO tickets were available online and over the counter through various sales channels. While the BDO website contained the full terms and conditions (including condition 6), they could be bypassed and customers would be presented with different terms and conditions, not containing condition 6, prior to finalising a purchase. Similarly, in over the counter sales, customers were not alerted to any special provisions of the ticket, including condition 6, prior to purchase.

Following eBay's complaints Creative took measures to ensure customers purchasing tickets online and over the counter were given notice of condition 6.

Analysis and findings

Creative was found to have engaged in conduct which was, or was likely to be, misleading or deceptive towards members of the public because condition 6 falsely asserted, without reasonable grounds, that tickets resold for profit would be cancelled.

The Court declared that Creative had contravened the misleading and deceptive conduct provisions of the TPA, and ordered an injunction preventing Creative from making representations that it had the ability to cancel tickets to the 2007 BDO sold by scalpers except in certain limited circumstances. It also ordered that Creative pay eBay's costs.

The Court confirmed the enforceability of a contract to purchase tickets online. In doing so, it reiterated the need for a ticket issuer to give notice to the purchaser of all significant conditions prior to the sale transaction. The inconsistency of information communicated through the various sales channels prior to purchase meant that the ticket's status as a contract varied depending on how the ticket was acquired.

As some ticket purchasers had not been informed of condition 6 prior to purchase, Creative misled ticket holders by representing on each ticket that condition 6 had contractual force. And, because Creative was unable to detect all 2007 BDO ticket scalping practices, condition 6 was a misrepresentation as to a future matter within the meaning of the TPA. The measures taken by Creative, following eBay's complaints, to convey consistent conditions were found to be effective.

The judge described the result as 'unfortunate'. He was satisfied that Creative intended condition 6 to protect customers from being exploited by scalpers, who created 'distortions in the market' and 'an artificial scarcity of tickets' that was facilitated by, and generated income for, eBay. For this reason, the Court did not require Creative to publish corrective advertising.

The best way to combat ticket scalping?

The case is an example of the misleading and deceptive conduct provisions, which sit in the consumer protection part of the TPA, being used by business to protect its own interests.

This decision demonstrates the importance of carefully drafting and offering consistent ticket conditions irrespective of the manner of purchase, as well as the need to specifically draw customers' attention to those conditions prior to purchase.

It also raises the issue of whether ticket scalping might be more effectively combated by specific legislation. For example, the Sports Event Ticketing (Fair Access) Act 2002 (Vic) prohibits a person from contravening a condition that is printed on a ticket to an event that has been declared under the Act (eg AFL Grand Final). Under the Act, a person is guilty of an offence and subject to a fine if they, among other things, knowingly contravene a condition that is printed on a ticket to a declared event. The South Australian Summary Offences (Ticket Scalping) Amendment Bill 2006 broadly follows the Victorian legislation.

Others have questioned whether the practice of ticket scalping is really a concern. From an event organiser's perspective, more tickets sold increases the possibility of a sellout, provides guaranteed revenue and together outweighs the higher costs of policing ticket scalping. For customers, scalpers create a secondary market which gives those willing to pay the market price an opportunity to attend an event.

In the absence of comprehensive legislation, event organisers wishing to reduce the impact of ticket scalpers must ensure they communicate clear and consistent ticket conditions as well as employ other strategies such as the staggered release of large quantities of tickets.