StubHub Must Face Lawsuit Over Hidden Fee Drip Pricing Allegations, Judge Rules

Courtesy Photo


Lawyers for the secondary ticket service and its parent company eBay sought to have the class action case moved to arbitration.

San Francisco Superior Court Judge Harold Kahn has denied a motion by StubHub to dismiss a suit that accuses the secondary ticketer of unlawful drip pricing.

Lawyers for StubHub and its parent company eBay sought to have the case, filed by plaintiff Susan Wang on Feb. 5, moved to arbitration, but the Northern California judge stated in his order that "a plaintiff's right to seek an injunction on behalf of the public pursuant to these statutes cannot be waived by an arbitration agreement."

StubHub's user agreement currently states that all legal disagreements between a user and the company would be resolved exclusively through final and binding arbitration.

Judge Kahn, however, stated in his denial the provision "prohibiting Ms. Wang from seeking public injunctive relief in any forum is contrary to California public policy and thus unenforceable" and adds that the provision itself says that "if the court decides that any part of the [provision] is invalid or unenforceable, the entirety of the arbitration agreement shall be null and void."

Since the lawsuit is a class action case that could benefit the general public and any individual benefit to Wang would be incidental, the judge has ordered that StubHub cannot force her into arbitration.

Earlier this year, Wang filed the class action lawsuit against StubHub for waiting to the end of a transaction to add fees to the price of a ticket, often increasing the price of seats by 20-to-30 percent. The practice, known as  'drip pricing,' is said to be misleading to consumers and akin to bait and switch tactics.

The complaint reads that StubHub and eBay "lure consumers into purchasing tickets for concerts, sporting events, and other live entertainment from StubHub's website by advertising artificially low ticket prices while hiding the amount of added fees that Defendants charge for each sale."

It goes on to say, "Only at checkout does StubHub for the first time list a total amount that includes hidden fees -- after consumers have already selected seats at a lower advertised price (that does not include fees), created a StubHub account or entered login credentials, entered credit card information, and clicked 'go to check out.'"

Lawyers for Wang state that StubHub hides the additional fees through a separate link and even when savvy customers click through for information on the price details, they are met with "service and delivery fees" that can range from 24-29 percent per ticket.

In addition to the accusation of unfair drip pricing, the complaint also accuses the company of misleading consumers with the term "service and delivery fees" when the plaintiff argues that those fees are entirely for profit.

"Tickets purchased through StubHub are often accessed through digital downloads. There is no reason why StubHub would incur expenses of over 20% of the ticker price to deliver a digital download," the complaint reads. "StubHub also does not do any work or suffer an expense listing tickets for sale."

The suit argues that the third-party seller is responsible for the delivery of the ticket and that StubHub already collects a 10 percent service fee from that seller once the ticket is sold.

"All consumers who have been enticed into purchasing tickets from StubHub by the pricing practices described in this complaint have suffered damage as a result of StubHub's false and misleading pricing practices," the suit reads.

StubHub declined to comment for this article.