A California judge has ruled against a motion to dismiss a lawsuit filed against StubHub over alleged “drip pricing” practices – showing an artificially low price to the consumer, only to disclose fees at the last minute – meaning the eBay (NASDAQ: EBAY) subsidiary and ticket resale giant will have its day in court on the matter.
Superior Court Judge Harold Kahn sided with the plaintiff, Susan Wang, stating that she put forth sufficient factual questions to get “past the pleading hurdle,” though he did add that her case may not be sufficient to “get her past any other hurdle,” according to topclassactions.com.
Wang filed the lawsuit in February, arguing that StubHub’s pricing practices violate sections of California’s Business and Professions Code, as well as the state’s Consumers Legal Remedies Act. From her initial filing, she is claiming StubHub and its parent company “lure consumers into purchasing tickets … by advertising artificially low ticket prices while hiding the amount of added fees” charged. Because the final fee disclosure is not given until after a consumer has logged in and entered payment details – and then hidden unless a user clicks to see the specific fees – the suit argues that many users “proceed through checkout without ever becoming aware of the amount of the so-called ‘service and delivery’ fees that have automatically been included in the total price.”
StubHub’s attorney’s argue that their practices differ from those deemed unlawful by a California appellate court in the case of Veera v. Banana Republic.
In that case, the court reportedly found that customers could allege they were lured into a store by a sign advertising sale prices and were coerced into paying the full retail price for merchandise after being told that some items were not covered by the sale.
Attorneys for the defendants argued that, unlike the Veera v. Banana Republic case, Wang purchased tickets on the internet and was never promised a bargain. StubHub claims that it did not defraud anyone because it did not misrepresent the price, such as by suggesting the price would be discounted by 40 percent as in the Veera case.
The main thrust of the decision this week simply prevented Wang’s case from being forced into binding arbitration, which is what StubHub’s team had been pushing for, arguing that all customers agree to settle disputes in that manner according to the website’s terms and conditions.
Ticketmaster is actually battling similar accusations in Canada over “drip pricing.” The Live Nation (NASDAQ: LYV) subsidiary was sued in January by the government’s Competition Bureau over the practice, followed just days later by a class action filed by consumers north of the border.