Implications of Grokster for Online Ticket Sale Companies: Why Online Ticket Resale Sites Should Be Held Liable For Violating State Scalping Laws

The Metro-Goldwyn-Mayer Studios v. Grokster decision extended secondary liability for copyright infringement to companies who distribute software that enables its users to commit infringement. The theory of holding Internet-based companies liable for enabling users to violate laws can be applied outside the narrow context of copyright law. A host of websites allow users to scalp tickets via the Internet. Among them is StubHub.com, a particularly successful ticket resale website. Many users of StubHub.com violate state scalping laws. StubHub.com places the responsibility of compliance with scalping laws solely on its users. Attorneys general and local law enforcement agencies may find it difficult to enforce ticket sales laws against individual scalpers who use the Internet to resell tickets. Grokster may offer an approach for holding the operators of ticket resale sites secondarily liable for illegal activity of their users.