WASHINGTON, DC (CelebrityAccess) – Attorney General Brian Schwalb filed a lawsuit on Wednesday (July 31) against StubHub, Inc. (StubHub), an online ticket exchange and resale platform, to put an end to StubHub’s deceptive and unfair practice of hiding mandatory fees from consumers until the end of a lengthy purchase process, and then failing to provide clear and accurate information about the purpose of those fees or how the costs are calculated. These deceptive and unfair practices interfere with consumers’ ability to compare prices and to make otherwise informed decisions about their ticket purchases, which is in violation of the District’s consumer protection laws.
“For years, StubHub has illegally deceived District consumers through its convoluted junk fee scheme,” said Attorney General Schwalb. “StubHub lures consumers in by advertising a deceptively low price, forces them through a burdensome purchase process, and then finally reveals a total on the checkout page that is vastly higher than the originally advertised ticket price. This is no accident—StubHub intentionally hides the true price to boost profits at its customers’ expense. 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.”
In an example from the lawsuit, StubHub advertised two tickets for $356 total, but the final cost with mandatory fees bumped the final due to $497. The complaint alleges StubHub defaulted to hiding its mandatory fees and that it offered consumers the option to view the total price of the tickets through an “Estimated Fees Filter” buried deep within its browser settings. But, according to the filing, that claim was false until March 2024, with StubHub adding surprise fees for those who used the filter.
“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,” said National Consumers League CEO Sally Greenberg. “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.”
From the Office of the Attorney General (OAG):
StubHub utilizes a “drip pricing” system whereby the company advertises an artificially low price to entice ticket buyers and then prompts them through a series of needless steps. At the same time, a countdown clock creates a false sense of urgency. By the time customers have made it past StubHub’s numerous pages—often over a dozen—to the end of the lengthy checkout process, they are often charged a final price substantially higher than the advertised price due to cryptic “fulfillment and service” fees tacked on without adequate explanation of the fees’ purpose. Consumers are 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. 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 to until they near the end of the checkout process.
StubHub designed the drip pricing scheme specifically to increase profits at the expense of consumers. From 2014 to 2015, StubHub utilized “all-in pricing,” in which advertised prices included mandatory fees. After a testing period that randomly assigned consumers to one of the two pricing models demonstrated that consumers are more likely to purchase tickets—and buy them at higher prices—if fees are hidden until the end, StubHub implemented its deceptive drip pricing model.
StubHub’s illegal conduct particularly impacts DC, as residents and visitors spend more per capita on live entertainment in Washington, DC, than in many other major US cities, including New York City, Los Angeles, Chicago, Boston, Miami, Nashville, and Austin. Since adopting the drip pricing model in 2015, StubHub has sold nearly 5 million tickets to District consumers, extracting an estimated $118 million in hidden fees.
With this lawsuit, the OAG alleges two violations of the Consumer Protection Procedures Act, one for unfair acts or practices and one for deceptive acts or practices. It seeks an injunction for StubHub to correct its violations, statutory civil penalties, damages and restitution.
In a statement to Variety, representatives for StubHub said, “StubHub is committed to creating a transparent, secure, and competitive marketplace to benefit consumers,” reads the statement. “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.”
The full complaint is available here.
Laura Beckerman, Senior Trial Counsel, is leading this matter, which is being supervised by Adam Teitelbaum, Director of the Office of Consumer Protection.
