StubHub Holdings has agreed to a $10 million settlement with the U.S. Federal Trade Commission over allegations that the ticketing platform did not make the total cost of live-event tickets sufficiently clear to consumers, the agency said on Thursday.
In a complaint and proposed consent order lodged with the U.S. District Court for the Southern District of New York, the FTC charged that the company "advertised ticket prices on its website without clearly and conspicuously disclosing up-front how much consumers actually would pay, including all mandatory fees," language the agency included in its filings.
The settlement will require StubHub to provide monetary relief to qualifying consumers who were affected by the alleged pricing practices. In addition, the FTC's order compels the company to present total ticket prices more prominently across its platform so that consumers can see the full amount they would be required to pay before completing a purchase.
The agency noted that it began enforcing its "Fees Rule" in May of last year. That rule mandates that businesses selling live-event tickets disclose the total price of tickets clearly to consumers. According to the FTC, it also sent a warning letter to the ticketing platform after the Fees Rule took effect.
The FTC's stepped-up enforcement comes after an executive order issued in March of last year that directed the agency to "take appropriate action ... to ensure price transparency at all stages of the ticket-purchase process, including the secondary ticketing market," language referenced by the agency in its filings. The complaint and proposed settlement were filed in the Southern District of New York federal court.
StubHub did not immediately respond to a request for comment, the FTC said.
For consumers and market participants, the settlement centers on how fees and mandatory charges are disclosed up front on secondary ticketing platforms. The FTC's remedies in this case combine both injunctive requirements - changing how prices are presented on the site - and monetary relief intended to compensate eligible purchasers affected by the alleged omission of mandatory fees.
Details about the process for identifying eligible consumers and distributing the monetary relief are contained in the proposed order filed with the court, which also documents the FTC's enforcement rationale and references the Fees Rule as the regulatory basis for the action.
Key points
- StubHub agreed to pay $10 million to settle FTC charges over failure to disclose total ticket prices up front.
- The FTC filed a complaint and proposed settlement in the U.S. District Court for the Southern District of New York and will require more prominent total price disclosures on StubHub's platform.
- The agency began enforcing its "Fees Rule" in May last year and says the settlement follows increased enforcement after a March executive order urging price transparency in ticketing.
Risks and uncertainties
- Regulatory compliance risk for secondary ticketing platforms - companies operating in ticketing and online marketplaces may face closer scrutiny of fee disclosure practices.
- Financial impact related to consumer restitution - the requirement to provide monetary relief could affect the financials of the defendant and inform how other platforms manage mandatory fees.
- Ongoing enforcement uncertainty - the FTC's renewed emphasis on the Fees Rule and related directives may lead to further investigations or actions in the ticketing sector.