The Attorney General for the District Of Columbia in the US, Brian L Schwalb, has sued secondary ticketing platform StubHub over its use of drip pricing and for “failing to provide clear and accurate information about the purpose of its fees or how the fees are calculated”.
Announcing the litigation, Schwalb says, “For years, StubHub has illegally deceived District consumers through its convoluted junk fee scheme”.
Under that scheme, he explains, “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”, Schwalb reckons. “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”.
Ticketing platforms - and especially ticket resale platforms like StubHub - have long been criticised for how they display and position prices and fees. Quite how this works differs from market to market, because in some countries regulation forces different practices. However, in the US many of the controversial practices continue, despite increased calls for industry-wide change.
That includes drip pricing, described in Schwalb’s lawsuit as “a classic bait-and-switch scheme” whereby a platform initially lists “only part of a product’s price” before “revealing other charges later as the consumer goes through the buying process”. In the context of ticketing, the face value of the ticket is listed upfront and then the ticketing platform’s often substantial and unavoidable fees are declared later in the process.
“By forcing consumers to click through over a dozen pages before they see the real price”, the lawsuit continues, “StubHub puts consumers in the position of having to choose between either paying those unexpected fees or abandoning the time and effort they have expended”.
It then cites a 2021 study that looked at consumer behaviour on the StubHub platform specifically. It found that “consumers focus on the deceptively low initial base price” and that “consumers will buy tickets at higher prices because they have built purchasing commitment through enduring StubHub’s lengthy purchasing process”.
Beyond the drip pricing approach, StubHub also “misrepresents the purpose of its fees”, the lawsuit adds. “What StubHub identifies as ‘'fulfillment and service fees’ are in fact influenced by factors unrelated to ‘fulfillment’ or ‘service’, including ticket price and even supply and demand”.
StubHub does offer an ‘include estimated fees’ tool so that buyers can see the likely fees to be charged earlier in the process. However, says the lawsuit, this tool is “hidden under multiple drop-down menus” in a way that means “a reasonable user of the service is unlikely to find and use” it. Plus, until March this year, when a change was made in response to concerns raised Schwalb's office, not all the mandatory fees were even included in that estimate.
Earlier this year two ticket buyers in California filed their own lawsuit against StubHub specifically relating to the estimated fees tool. It claimed that the tool was set up to “consistently and systematically understate” the fees that would have to be paid.
Schwalb reckons that StubHub’s pricing practices constitute deceptive and unfair acts in violation of the District Of Columbia's Consumer Protection Procedures Act.
StubHub in the US is part of the same company as Viagogo in the rest of the world. Both StubHub and Viagogo have been repeatedly criticised by artist and consumer groups, who have called for more regulation of secondary ticketing in multiple countries.
The resale of tickets is currently lightly regulated in the US, although the campaign for better regulation has started to gain momentum recently. And, regarding the specific issues raised in Schwalb’s lawsuit, US President Joe Biden has made tackling what he calls ‘junk fees’ a priority.