StubHub Sued for Illegally Boosting Profits With Deceptive Pricing and Junk Fees in Washington

Publish date: 2024-07-12

Attorney General Brian L. Schwalb filed a suit today against StubHub, accusing the ticket reseller of deceptive pricing and junk fees.

The complaint, filed in Washington, D.C.’s Superior Court, states that StubHub has been using a predatory “drip pricing” model to illegally boost profits. Since employing this method, StubHub has apparently sold 4.9 million tickets and elicited $118 million in hidden fees in D.C. alone since 2015 — particularly notable as the District outpaces cities including Los Angeles and New York City in per capita spending on live event ticketing.

In a statement shared with Variety, representatives for StubHub expressed disappointment in the suit and rebuffed claims of illegally boosting profits. “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.”

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Drip pricing is the practice of advertising low prices that become inevitably inflated by hidden fees at purchase point. The complaint states that StubHub uses a 10-minute countdown clock to create a sense of pressure and false urgency as consumers go through a series of needless steps across unnecessary filler pages to make a purchase. If the consumer idles on a page for approximately 30 seconds, a window pops up telling them how much time is left to hit purchase. By the time the buyer makes it to checkout, prices are substantially higher due to cryptic “fulfillment and service” fees that lack adequate explanation.

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Additionally, drip pricing makes it more difficult for buyers to comparatively shop for cheaper tickets due to tight window periods to complete the purchase. Schwalb’s office claims that StubHub tested its drip pricing method from 2014 to 2015, randomly offering some users “all-in pricing” — when all mandatory fees are apparent from the start — and others drip pricing. After deducing that purchasers are more likely to buy them at higher prices using the drip model, StubHub reportedly implemented it as the de facto purchase method.

In the example provided in the complaint, StubHub advertised two tickets for $356 total, but the final cost with mandatory fees bumped the final tally to $497. The suit claims that StubHub defaults 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 in its settings. But, according to the complaint, that claim was false until at least March 2024, with StubHub adding surprise fees for those who enabled that filter.

“For years, StubHub has illegally deceived District consumers through its convoluted junk fee scheme,” said 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.”

“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.”

Schwalb is suing StubHub for violations of the Consumer Protection Procedures Act and asking for injunctive relief to remedy StubHub’s violations; relief to redress injury from violating the CPPA; and pay civil penalties for each violation. Senior Trial Counsel Laura Beckerman will lead this matter under the supervision of Adam Teitelbaum, director of the Office of Consumer Protection.

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