A federal lawsuit filed last week in California accuses ticket resale giant StubHub of a systematic underestimation of its fees, which the complaint alleges is a deliberate effort to mislead consumers. The lawsuit, brought by Lisa Alcaraz and Brian Hong, was filed in California’s Central District.
In the complaint, the plaintiffs allege that when consumers use StubHub’s option to show ticket prices with “estimated fees” included, it always understates the total price by a fixed amount: $3. That extra fee is added at the end of the transaction, bumping the price beyond the estimate shown.
“After running over a hundred ticket selection experiments on StubHub.com”, their lawsuit states, “plaintiffs and their counsel discovered StubHub invariably understates the total cost (with estimated fees) of every single ticket quoted at or above $20 by an exact amount of $3 per ticket. Every single time. Like clockwork”.
The lawsuit alleges that the deliberate understatement of these fees an effort to hide the true cost of tickets on the company’s marketplace, even for customers who are using their tool which purports to show a true “all-in” price of the tickets inclusive of fees.
The fact that it is by a specific dollar value across a large-scale experiment, it argues, shows that “StubHub is not estimating anything”, the lawsuit continues. It is simply understating the fees it will charge the customer, it’s alleged, and then covering up that fact by claiming the declared price is an “estimate”. According to the lawsuit, Alcaraz initially discovered the alleged fee issues while purchasing ticket on the marketplace to see The Weeknd, while Hong was purchasing tickets to the When We Were Young festival.
Ticket fees and the ticket sale and resale ecosystem as a whole have been under intense scrutiny since the return of live events from the COVID-era shutdown. While consumers and lawmakers have taken swipes at what many allege to be a monopolistic entity at the center of live entertainment, and the Live Nation/Ticketmaster lobby and other venue-backed organizations have tried to pin the skyrocketing prices on ticket resale, one thing that most seem to agree on is the ending of hidden so-called “junk fees.”
Such fees have long been the standard operating procedure for ticketing, both on the “primary” marketplace and on resale marketplaces. Consumers shop for tickets, and are shown one price. However, once they select tickets and move to purchase them, additional fees are tacked on, often adding a significant percentage of the ticket price added on top of what price was shown while browsing.
President Biden and his administration have made a point of going after such fee structures, in both the ticketing industry and elsewhere. The Federal Trade Commission has made plans to issue new rules requiring such price disclosures, and both state and federal lawmakers have introduced legislation to make ticket price transparency required by law – but only a handful (New York and Connecticut among them) have passed such efforts and seen them gone into effect.
Alcaraz and Hong note this in their lawsuit. “The Biden Administration has … announced efforts to crack down on junk fees and bring down costs for American consumers by working with federal agencies, Congress and private companies”, they write. “In explaining those efforts, the White House noted that junk fees cost American families tens of billions of dollars each year”.
Some ticketing companies have pledged a move to displaying the full price, inclusive of fees, as a default. But outside of a handful of outliers – marketplaces like TickPick, MEGASeats, and Ticket Club – ticketing companies have largely stuck with the hidden fee model, displaying “all-in” prices only in states where laws requiring it have passed, but offering consumers the option of viewing the full price by selecting that as an option while they browse – StubHub being one of them.
The lawsuit is seeking class action status. It accuses StubHub of fraud and unjust enrichment, as well as violating California state laws regarding false advertising, unfair competition, and ticket sales.
