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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.
Conclusion
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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