The StubHub logo is seen at their headquarters in San Francisco.
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Washington, D.C. Attorney General Brian Schwalb on Wednesday sued online ticket-sharing platform StubHub, alleging deceptive and unfair pricing.
The lawsuit alleges that StubHub uses deceptive advertising of low ticket prices to attract consumers who pay significantly more after an arduous checkout process.
“This is no coincidence: StubHub intentionally hides the real price to increase profits at the expense of its customers,” Schwalb said in a statement.
The ticketing platform, valued at more than $16 billion, had been considering an IPO in the summer. However, earlier this month, the company announced it would delay the IPO until after Labor Day, citing difficult market conditions.
The attorney general's lawsuit claims the ticketing platform uses a system called “drip pricing,” which employs a countdown clock to create a false sense of urgency. The suit claims StubHub adds substantially higher “fulfillment and service fees” without adequate explanation.
The lawsuit comes at a time when consumers and lawmakers alike are criticizing hidden or “junk” fees charged by ticket sellers. Other companies, such as airlines, have also been accused of misleading pricing.
In its complaint, the attorney general’s office said that from 2014 to 2015, StubHub used “all-inclusive pricing,” in which the advertised price included mandatory fees. The complaint alleged that StubHub conducted a test period in which it randomly assigned consumers to one of two models. The company found that if it hid fees until the end of the purchasing process, consumers were more likely to buy tickets and purchase them at higher prices, according to the complaint.
“The District of Columbia is particularly affected by StubHub's unlawful conduct, as residents and visitors spend more per capita on live entertainment in Washington, D.C., than in many other U.S. cities,” the Attorney General's office said.
In one example, the complaint shows a pair of tickets with an advertised price of $178 each, or $356 per pair. As the clock ticks down, the checkout page shows the total price about 40% higher, at $497 for the two tickets.
“StubHub never explains to consumers during the purchasing process how the costs of purchasing a particular ticket are calculated,” the complaint states.
Since 2015, StubHub has sold more than 5.5 million tickets to District consumers, extracting approximately $118 million in hidden fees, the Attorney General's office said.
The company also faced a federal class-action lawsuit in January over allegations it deliberately misled customers about ticket prices.
StubHub has been a major player in the ticketing industry since its launch in 2000.
Co-founder Eric Baker and his company Viagogo reacquired the ticket seller from eBay in 2020 in a $4 billion deal.
