Resale platform StubHub sued for allegedly inflating ticket prices with extra fees

The attorney general for Washington, D.C., sued StubHub on Wednesday, accusing the ticket resale platform of advertising deceptively low prices and then ramping up prices with extra fees.

The practice known as "drip pricing" violates consumer protection laws in the nation's capital, Attorney General Brian Schwalb said.

"StubHub intentionally hides the true price to boost profits at its customers' expense," he said in a statement.

The company said it is disappointed to be targeted, maintaining its practices are consistent with the law and competing companies as well as broader industry norms.

"We strongly support federal and state solutions that enhance existing laws to empower consumers, such as requiring all-in pricing uniformly across platforms," the company said in a statement.

LISTEN | Canada banned drip pricing, but it's still happening: 

The Current9:31Drip pricing is banned, but Canadians are still paying out

Drip pricing involves extra fees that show up at checkout, hiking the advertised cost of things such as movie tickets. It’s been banned by the Competition Bureau, but it’s still happening. 

The lawsuit, meanwhile, says StubHub hides mandatory "fulfilment and service" fees until the end of a lengthy online purchasing process that often requires more than a dozen pages to complete as a countdown timer creates a sense of urgency.

That makes it "nearly impossible" for buyers to know the true cost of a ticket and compare to find the best price, he said. Fees vary widely and can total more than 40 per cent of the advertised ticket price, the lawsuit alleges.

Hidden fees 'out of control,' says advocate

StubHub, based in New York, is one of the world's largest resale platforms for tickets to sports, concerts, and other live events.

Sally Greenberg, CEO of the nonprofit advocacy group National Consumers League, applauded the lawsuit. "Hidden fees in the ticketing industry have truly gotten out of control. The price that is advertised is the price that we should pay — full stop," she said.

Ticket fees were also part of a sweeping antitrust lawsuit the U.S. Justice Department filed against Ticketmaster and its parent company in May.

StubHub used to advertise the "all-in" cost of a ticket about a decade ago, but changed after finding that people are more likely to buy tickets at higher prices with the "drip pricing" model.

Washington residents' per-capita spending on live entertainment outpaces that of many other major U.S. cities, and since 2015, StubHub has sold nearly five million tickets in Washington and reaped about $118 million US in fees, the suit states.

The lawsuit seeks damages and to block the pricing practices. Schwalb settled another lawsuit last year with the Washington Commanders over fans' season ticket deposit money.