Washington, D.C
StubHub Sued By Washington D.C. Attorney General Over Alleged Deceptive Pricing
Topline
The Washington, D.C., attorney general’s office sued second-hand ticketing platform StubHub on Wednesday, alleging the company participates in deceptive pricing and hides mandatory fees from consumers—marking the latest in a wave of antitrust crackdowns under the Biden Administration.
View of the company logo and office entrance for online ticket exchange company StubHub at its … [+]
Key Facts
Attorney General Brian L. Schwalb filed the suit Wednesday, alleging StubHub’s practices “interfere with consumers’ ability to compare prices” and make informed decisions about where to buy tickets, according to a media release.
The suit takes issue with StubHub’s practice of “drip pricing,” which is when a company advertises an artificially low price to get buyers interested, “prompts them through a series of needless steps while a countdown clock creates a false sense of urgency” then increases the price due to fees tacked on at the end.
Schwalb’s office said StubHub used a pricing model that showed accurate prices from 2014 to 2015, but changed to “drip pricing” after finding people were more likely to buy tickets if fees were hidden until the end.
The attorney general alleged two violations of the consumer protection procedures act, one violation for unfair acts or practices and one for deceptive acts or practices, and seeks an injunction requiring StubHub to remedy its violations, statutory civil penalties and damages and restitution, according to a copy of the suit shared with Forbes.
Forbes has reached out to StubHub for comment on the suit.
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Surprising Fact
The D.C. attorney general argued in its media release that Washington is “particularly impacted by StubHub’s illegal conduct” as its residents and visitors spend more per capita on live entertainment than in many other cities, including Boston, Chicago, Los Angeles and New York City.
Big Number
4.9 million. That’s how many tickets StubHub has sold to people in Washington, D.C. since 2015, when the company enacted its “drip pricing” model. In a press release, the attorney general’s office said StubHub has extracted about $118 million in hidden fees from those sales.
Key Background
StubHub is the latest ticket seller to be sued over alleged illegal activity around pricing and fees. In May, the Department of Justice sued Live Nation—which owns Ticketmaster after they merged in 2010—alleging the two ticket sellers used various tactics to “eliminate competition and monopolize markets,” including long-term ticketing contracts, blocking venues from using multiple ticketers and acquiring its competitors. On the same day, a New York ticket buyer filed a class action suit against Live Nation, alleging the companies force consumers to pay high prices through “excessively high fees” and limit competition among resale sites, thus pushing up prices in the secondary market. Consumers have been critical of ticket prices and the fees that accompany them for years, and the controversy was thrust into the spotlight in 2022 when Ticketmaster botched the sale of tickets to Taylor Swift’s Eras Tour. Last October, President Joe Biden proposed banning junk fees and requiring companies—whether hotels or ticket vendors—to show the full price up front.
Further Reading