StubHub is facing a lawsuit filed by the Washington, DC Attorney General Brian Schwalb, accusing the company of deceiving sports fans and concertgoers with a pricing scheme that hides the true cost of tickets until the last moment. The lawsuit alleges that StubHub uses a pricing tactic known as “drip pricing”, where only part of the ticket price is advertised initially, leading consumers to overpay for tickets in order to boost profits. The company is accused of creating a false sense of urgency with a countdown clock to pressure consumers into making purchases out of fear of losing the tickets.
The attorney general’s office claims that since adopting this pricing model in 2015, StubHub has sold almost 5 million tickets to Washington, DC consumers, generating $118 million in “hidden” fee revenue. Schwalb stated that StubHub intentionally hides the true price of tickets to increase profits at the expense of customers, luring them in with deceptively low prices and revealing significantly higher prices at checkout. StubHub’s deputy general counsel John Lawrence responded to the allegations by stating that the company is committed to creating a transparent and competitive marketplace for consumers and supports solutions that enhance consumer protection.
The lawsuit also highlighted that from 2014 to 2015, StubHub used an “all-in pricing” model where advertised prices included mandatory fees. However, the company reportedly abandoned this more transparent model after testing found that customers were more likely to purchase tickets when fees were only revealed at the end of the checkout process. Lawrence defended StubHub’s practices by claiming they are consistent with the law, competitors’ practices, and the e-commerce sector as a whole. The company believes that federal and state regulations should mandate uniform all-in pricing across platforms to empower consumers.
Schwalb’s lawsuit against StubHub emphasizes the need for transparency in pricing to prevent consumers from being misled and overcharged for event tickets. The attorney general accuses StubHub of using manipulative pricing tactics to capitalize on customers’ eagerness to attend events by concealing the true cost of tickets until the last minute. With millions of tickets sold through this pricing model, StubHub has profited significantly from hidden fees, according to the lawsuit. The allegations raise concerns about dishonest marketing practices and the impact on consumer trust in the ticket resale industry.
The legal action against StubHub sheds light on the importance of regulating online ticket sales to protect consumers from deceptive pricing strategies. The lawsuit suggests that the company’s pricing tactics exploit consumers’ emotions and urgency to secure tickets for popular events, leading to higher prices than initially advertised. By calling for greater transparency and uniform pricing standards across platforms, the attorney general aims to hold StubHub and other ticket resellers accountable for their pricing practices. As the case unfolds, it will likely prompt discussions on consumer rights, fair competition in the ticketing industry, and the need for clearer pricing policies to prevent exploitation. The outcome of the lawsuit could have implications for how ticket resale platforms operate and how they disclose pricing information to consumers moving forward.
