Washington D.C. Sues StubHub Alleging “Junk Fee Scheme”

Washington D.C. Attorney General Brian L. Schwalb has filed a lawsuit against StubHub in the district, saying that the company’s hiding of mandatory fees from consumers until the end of a transaction constitutes an unfair and deceptive trade practice. The lawsuit seeks to force the company to use “all-in” ticket pricing in the district to allow consumers to make a better informed purchasing decision while shopping for live event tickets.

“StubHub intentionally hides the true price to boost profits at its customers’ expense,” reads a statement from Schwalb announcing the lawsuit, in part. “The District is home to one of the nation’s largest and most vibrant live entertainment scenes, and StubHub’s predatory tactics disproportionately harm District residents. That is why today we’re suing to end StubHub’s exploitative pricing scheme.”

Responding to the lawsuit, a StubHub spokesperson said the company’s pricing systems are in line with the standards of the industry and the law.

“StubHub is committed to creating a transparent, secure, and competitive marketplace to benefit consumers,” they told TicketNews via email Wednesday afternoon. “We are disappointed that the DC Attorney General is targeting StubHub when our user experience is consistent with the law, our competitors’ practices, and the broader e-commerce sector. We strongly support federal and state solutions that enhance existing laws to empower consumers, such as requiring all-in pricing uniformly across platforms.”

At the lawsuit’s core is the practice of so-called “drip pricing” – showing one ticket price when consumers are first browsing for tickets, then adding fees once the buyer has completed most of the process of buying the tickets. The complaint also illustrates a number of other tactics used by the platform that it says increase the pressure on consumers to buy tickets despite the added fees. These include a countdown clock for the transaction, warnings over how many people have viewed the event in the past hour, and how fast tickets are selling, with the added fees coming amid this flurry of panic-buy pressure, according to the complaint.

“Faced with this inflated total and the countdown timer threatening to make them start the whole process over, consumers are pressured into the purchase out of fear that they risk losing the tickets,” the press release announcing the complaint says. “Drip pricing also makes it nearly impossible for consumers to comparison shop between StubHub and other platforms, since they don’t know what the fee will amount until they near the end of the checkout process.”

It claims that StubHub’s practices have “extracted” an estimated $118 million in hidden fees from consumers in Washington since 2015, when the company ended an early “all-in” pricing effort due to its competitors gaining market share by not following their lead and continuing to hide fees.

Drip pricing practices have long been common in ticketing – on both primary box office and resale marketplace transactions – but have come under heavy scrutiny from consumers, consumer advocates and lawmakers.

“Hidden fees in the ticketing industry have truly gotten out of control. The price that is advertised is the price that we should pay—full stop,” National Consumers League CEO Sally Greenberg says in the Washington D.C. lawsuit announ cement. “The District of Columbia is one of the best jurisdictions in the nation when it comes to fighting for consumers. We’re grateful for Attorney General Schwalb’s leadership in this space and look forward to continuing to support his work on behalf of the public.”

The Biden Administration has made the battle against so-called “junk fees” a major policy priority. The Federal Trade Commission has plans to issue rules limiting the practice across many industries, including ticketing. And many ticket sellers have promised to make it easier for consumers to choose to view prices with all fees included – though most still default to show the price without fees.

Multiple states have also passed legislation requiring “all-in” pricing for event tickets, but efforts to do so at the federal level have been stymied by the powerful Live Nation Entertainment-backed industry lobby, which is pushing hard to incorporate harsh anti-resale regulations into any new federal laws, though it nominally supports “all-in” pricing as well.

The TICKET Act, which would mandate “all-in” pricing has been passed by the House of Representatives, but the industry lobby is pushing to amend it extensively to reflect its preferred regulatory agenda.

The full complaint document is available here (PDF opens in new window)