Recently, Washington, D.C. Attorney General Brian Schwalb filed a lawsuit against the online ticket exchange platform StubHub. The lawsuit accuses StubHub of engaging in deceptive and unfair pricing practices. According to the attorney general, StubHub intentionally advertises low ticket prices to attract consumers, only to reveal significantly higher prices during the checkout process. This misleading practice, known as “drip pricing,” creates a false sense of urgency through a countdown clock, prompting consumers to make hasty decisions without a clear understanding of the total costs involved.
The lawsuit also highlights StubHub’s use of “fulfillment and services fees” added to the final ticket price without proper disclosure or explanation. This lack of transparency in pricing has been a growing concern among consumers and lawmakers, with other industries like airlines also facing similar allegations of deceptive practices. The attorney general’s office noted that StubHub previously used an “all-in pricing” model in 2014-2015, where mandatory fees were included in the advertised price. However, the company later shifted to a model that hid fees until the end of the checkout process, resulting in higher ticket prices and increased profits.
The lawsuit emphasizes the disproportionate impact of StubHub’s pricing practices on Washington, D.C. residents and visitors, who reportedly spend more per capita on live entertainment compared to other U.S. cities. An example provided in the complaint illustrates how a pair of tickets advertised at $178 per ticket ultimately increased to $497 for the pair during checkout, representing a 40% price hike. Despite selling over 5.5 million tickets in the district since 2015, StubHub has allegedly collected $118 million in hidden fees from unsuspecting consumers.
This lawsuit is not the first legal challenge faced by StubHub regarding its pricing strategies. Earlier this year, the company was hit with a federal class-action lawsuit for misleading customers on ticket prices. Despite its status as a major player in the ticketing industry, with co-founder Eric Baker and his company Viagogo reacquiring the platform from eBay in a multi-billion dollar deal, StubHub’s reputation is now at stake due to mounting legal scrutiny.
Overall, the allegations against StubHub raise serious concerns about the need for increased transparency and accountability in the ticketing industry. Consumers deserve fair and upfront pricing that accurately reflects the total cost of their purchases, without being subjected to hidden fees or deceptive advertising tactics. As the legal battle unfolds, it remains to be seen how StubHub will address these allegations and whether it will make significant changes to its pricing practices in response to the lawsuit.