Washington, D.C. Attorney General Brian Schwalb sued online ticket exchange platform StubHub on Wednesday, accusing its pricing of being deceptive and unfair.
The lawsuit alleges that StubHub used deceptive advertising of low fares to lure consumers who would pay more after going through an arduous checkout process.
“This was no accident, StubHub deliberately concealed its true prices to boost profits at the expense of its customers,” Schwalb said in a statement.
The ticketing platform, valued at more than $16 billion, has been considering a summer initial public offering. However, earlier this month, the company announced that it would Postponement of initial public offering until after Labor Day, citing difficult market conditions.
The attorney general’s lawsuit alleges that the ticketing platform used a system called “drip pricing” that used countdowns to create a false sense of urgency. The complaint alleges that StubHub significantly increased “delivery and service fees” without adequate explanation.
In a statement in response to the lawsuit, StubHub said it strongly supports federal and state proposals that seek to strengthen existing laws to empower consumers, such as by requiring uniform pricing across platforms.
“StubHub is committed to creating a transparent, secure, and competitive marketplace that benefits consumers. We are disappointed that when our user experience complies with the law, the practices of our competitors, and broader e-commerce, the Washington, D.C. General The Attorney General instead targeted StubHub,” the company said.
The lawsuit comes amid criticism from consumers and lawmakers about hidden or “junk” fees charged by ticket sellers. Other businesses, including airlines, have also faced accusations of deceptive pricing.
The attorney general’s office said in the lawsuit that from 2014 to 2015, StubHub used “blanket pricing,” in which advertised prices included mandatory fees. The complaint alleges that StubHub did Randomly assign consumers to the test period to one of two models. The company found that consumers were more likely to purchase tickets and purchase them at a higher price if fees were hidden until checkout ended, the lawsuit said.
“The District of Columbia is particularly affected by StubHub’s illegal conduct because residents and visitors to Washington, D.C., spend more per capita on live entertainment than many other cities in the United States,” the Attorney General’s Office said.
In one example, the complaint shows two tickets advertised at $178 each, or $356 for a pair. As time went on, the checkout page showed the total price of the two tickets had increased by about 40%, to $497.
“StubHub never explains to consumers throughout the purchase process how the cost of a specific ticket purchase is calculated,” the complaint states.
The AG’s office said StubHub has sold more than 5.5 million tickets to consumers in the region since 2015, collecting about $118 million in hidden fees.
The company also faces federal class action lawsuit It was accused in January of deliberately misleading customers about ticket prices.
Since its launch in 2000, StubHub has been one of the top players in the ticketing industry.
Co-founder Eric Baker and his company Viagogo reacquired the ticket seller from eBay in 2020 in a $4 billion deal.
