The Washington, D.C. attorney general filed a lawsuit against ticket resale platform StubHub on Wednesday, accusing the company of advertising deceptively low prices and then inflating prices with surcharges.
Attorney General Brian Schwalb said the practice, known as “drip pricing,” violates the nation’s consumer protection laws.
“StubHub purposely hides the true prices in order to increase profits at the expense of their customers,” he said in a statement.
The company said it was disappointed to be targeted and maintained that its practices were consistent with the law, its competitors and industry-wide norms. “We strongly support federal and state solutions that strengthen existing laws to strengthen consumer rights, such as by mandating uniform all-in pricing across platforms,” the company said in a statement.
Meanwhile, the lawsuit alleges that StubHub creates a sense of urgency with countdown timers, hiding mandatory “fulfillment and service” fees until the end of its lengthy online purchasing process, which often takes more than 12 pages to complete.
That makes it “nearly impossible” for buyers to know the true cost of tickets and compare prices to find the cheapest price, he said. The fees vary widely and can add up to more than 40 percent of the advertised ticket price, the lawsuit alleges.
New York-based StubHub is one of the world’s largest platforms selling tickets to sports, concerts and other live events.
Sally Greenberg, CEO of the National Consumer Federation, a nonprofit advocacy group, praised the lawsuit. “Hidden fees in the ticketing industry have really gotten out of control. The price that’s advertised is the price we should pay. Period,” Greenberg said. Ticket fees were also part of a larger antitrust lawsuit the Department of Justice filed against Ticketmaster and its parent company in May.
About a decade ago, StubHub advertised a “gross” price for tickets, but changed its prices after realizing that a “drip pricing” model meant people were more likely to buy tickets at the higher price.
Washington state residents spend more per capita on live entertainment than most other major U.S. cities, and since 2015, StubHub has sold approximately 5 million tickets in Washington, earning approximately $118 million in commissions, the lawsuit said.
The lawsuit seeks damages and a block on price fixing. Schwalb settled a separate lawsuit last year with the Washington Commanders over fan season-ticket deposits.
