By Megan Sayles
AFRO Business Writer
msayles@afro.com
D.C. Attorney General Brian L. Schwalb has sued leading online ticket exchange and resale company StubHub, accusing the platform of deceptive pricing. The civil suit was filed in a D.C. trial court on July 31.
Schwalb accused the company of engaging in “drip pricing,” a strategy where companies initially market a low price to attract consumers and later disclose additional fees during the purchasing process. The charges include fulfillment and service fees.
StubHub, an online ticket exchange and resale platform, is facing a civil lawsuit from D.C. Attorney General Brian L. Schwalb. The suit, filed on July 31, accuses the company of deceptive pricing practices. (AFRO Photo / Tierra Stone)
“For years, StubHub has illegally deceived District consumers through its convoluted junk fee scheme,” said Schwalb in a July 31 release. “StubHub lures consumers in by advertising a deceptively low price, forces them through a burdensome purchase process and then finally reveals a total on the checkout page that is vastly higher than the originally advertised ticket price. This is no accident—StubHub intentionally hides the true price to boost profits at its customers’ expense.”
The District houses several professional sports teams, including the Washington Commanders, Nationals and Capitals, as well as 41 entertainment venues and theaters. The attorney general asserts that the city has been disproportionately impacted by StubHub’s practices as visitors and residents spend more per capita on live entertainment than other major destinations, like New York, Los Angeles and Chicago.
“The District is home to one of the nation’s largest and most vibrant live entertainment scenes, and StubHub’s predatory tactics disproportionately harm District residents,” Schwalb continued. “That is why today we’re suing to end StubHub’s exploitative pricing scheme.”
In the complaint, Schwalb claims the ticketing platform previously used an all-in-pricing model from 2014 to 2015, which advertised prices that included mandatory fees up front. StubHub then conducted a study to compare the more transparent model against drip pricing.
During the testing period, the company randomly assigned customers to one of the two pricing strategies. Stubhub discovered that even when the final price was the same, consumers were less likely to buy tickets in the all-in-pricing model. It subsequently implemented drip pricing.
The lawsuit also asserts that StubHub engages in dark patterns, including creating a false sense of urgency and high demand. According to the complaint, the company has sold nearly 4.9 million tickets to Washingtonians and for District events, amassing $118 million in hidden fees.
The litigation follows the Federal Trade Commission’s 2023 announcement of a proposed rule that would prohibit hidden and bogus fees for resorts, concert tickets, hotel booking and more.
StubHub says the back-end fees help the company provide a secure ticket-buying experience. The platform charges a fee when consumers buy and sell tickets on the site. These fees can vary depending on the ticket price, time before the event and supply and demand.
“StubHub is committed to creating a transparent, secure and competitive marketplace to benefit consumers,” wrote StubHub in a statement to the AFRO. “We are disappointed that the D.C. attorney general is targeting StubHub when our user experience is consistent with the law, our competitors’ practices and the broader e-commerce sector. We strongly support federal and state solutions that enhance existing laws to empower consumers, such as requiring all-in pricing uniformly across platforms.”
