Live Nation’s Ticketmaster will be offering a voucher worth up to CA$45 to Canadians who bought tickets in the first half of 2018. The offer is the outcome of a class action lawsuit that claimed that ‘drip pricing’ tactics employed by the ticketing platform at that time violated Canada’s consumer rights laws.
Drip pricing is where a ticketing website adds extra non-optional fees to the face value of a ticket at the final stage of a transaction, rather than at the start of the ticket buying process.
The class action against Ticketmaster alleged that the ticketing company’s “previous marketing practices with respect to price representations and non-optional fee displays were contrary to the Consumer Protection And Business Practices Act and similar legislation of various Canadian jurisdictions”.
As a class action, the lawsuit set out to represent all the Canadian Ticketmaster customers who experienced drip pricing in the first half of 2018. Ticketmaster denied any wrong-doing but nevertheless opted to negotiate a settlement rather than fight the class action in court.
A deal was done last year and that arrangement was approved by the Canadian courts this week. The ticketing firm will pay a total of CA$6 million to settle the case, though $1,725,000 will go to the lawyers, while the ticket-buyer who was lead plaintiff on the lawsuit will receive an honorarium of $25,000. The rest will be shared out between all the ticket buyers that the class action aimed to represent.
The judge who approved the settlement deal, Graeme Mitchell, says, “while this case does not involve a mega-settlement, it has proved to be a legitimate consumer protection lawsuit which could only have been viably prosecuted as a class action”.
Defending the fact that a sizable portion of the settlement money will go to the lawyers, the judge added that that legal team “deserve an economic incentive for pursuing this claim to its successful resolution”.
Ticketing sites adding fees late on in the ticket buying process has always been controversial. The rules on drip pricing differ from country to country.
In the UK, regulations set by the Advertising Standards Authority require ticketing sites to declare the full cost of the ticket upfront in most circumstances. In the US, until recently rules differed from state to state, although the Federal Trade Commission recently published a US-wide rule on junk fees that says that the full price must be declared upfront.
While the claims in this class action - that drip pricing in 2018 breached Canada’s Consumer Protection Act - were not assessed in court, this Legal 500 article explains that legal reforms since 2018 have clarified things somewhat regarding the rules on drip pricing in Canada.
It notes that amendments made to the Canadian Competition Act in 2022 explicitly recognised drip pricing as a “harmful business practice”, and that in recent years the country’s Competition Bureau has gone after various companies that it believed had broken the law with drip pricing tactics, including Ticketmaster, StubHub, Cineplex and Sirius XM.