StubHub has drip – and not the good kind, DC’s attorney general alleges

Washington DC’s attorney general sued StubHub yesterday for allegedly violating consumer protection laws via a practice known as drip pricing. Or to put it in common parlance – StubHub’s checkout process is potentially catfishing consumers.

How the company’s drip-pricing model works, per the complaint:

• Once a consumer begins the multi-page checkout process, a 10-minute countdown timer appears on the screen, creating a “false sense of urgency,” according to DC Attorney General Brian Schwalb.
• After the potential ticket purchaser navigates through multiple pages during checkout, the fees are presented. And like the trash-bag brand, they can be hefty. In one example detailed in the lawsuit, StubHub advertised two tickets for $356, but mandatory (unexplained) fees increased the price nearly ~40% to $497. This variation + the fake countdown makes it “nearly impossible” for buyers to know the true cost of a ticket and compare to find the best price, per Schwalb.

Things didn’t always go down this way. From 2014 to 2015, StubHub used “all-in pricing,” where the advertised ticket price actually did include mandatory fees.

But after running a test where it randomly assigned consumers to either this model or the drip pricing model, the company found that if it hid fees until the end of the checkout, consumers were more likely to buy tickets and purchase them at the higher prices, according to the lawsuit.

• Since 2015, when it implemented the drip pricing model, StubHub has allegedly pocketed ~$118 million in fees just from DC consumers (whose per-capita spending on live entertainment surpasses many other major US cities).

🎟️ Zoom out: The Taylor Swift Effect isn’t just economic – it seemingly applies to government, too. Since the Ticketmaster Eras Tour fiasco in 2022, the US has been cracking down on hidden and “junk” fees. The FTC proposed a rule last year that would ban ticketing services and other businesses from charging such fees, and is expected to issue a decision on the proposal later this year. The House also passed a bill in May that would force ticket sellers to show overall prices upfront.