By Jillian Dahrooge

Online ticket websites were initially created to make ticket-buying easier for consumers, however, consumers are punished for this convenience with unclear servicing fees. Today, the majority of consumers use websites, such as Ticketmaster, Live Nation, and StubHub, to purchase tickets for concerts or sporting events. However, the excessive face-value of ticket prices combined with service fees has turned concerts or sporting events into a luxury. Although online ticket retailers conveniently removed the salesperson from the process, customers are still paying service fees. Typically, these fees are more expensive than fees paid in-person at a box office. The way these fees are presented and perceived by the majority of consumers directly contradicts Consumer Protection Laws. When purchasing event tickets online, service fees are not explained upfront, yet are required to be paid in order for the customer to receive their ticket.

Discussions surrounding the unfairness of ticket servicing fees started as early as 2010, yet no improvements have been implemented. Consumer Reports found a trend showing that service fees increase the face value of ticket prices by 20% despite consumers voicing their complaints. When using online ticket websites, service fees are unavoidable and do not appear until the final checkout stages. The retailer can change their service fee prices with little to no notice. StubHub states that it “reserves the right in its sole discretion to change fees at any time as it deems appropriate, including after you list your tickets.” The purpose of service fees is for companies, like StubHub, to make a profit.

Ticket retail websites can choose to include fees such as delivery fees, facility fees, and order-processing fees set at various and unexplained price ranges. Delivery fees are determined by the customer and the option to include multiple delivery options is determined by the venue. Customers are given the option to print tickets at home, have them mailed, or sent to a mobile device. These fees are typically spelled out and cause little issue for customers; however, it has been reported that delivery fees are added even when customers choose to print the tickets themselves or have the ticket sent to their mobile device. Facility fees are also included and are a fee set by the venue where the event will take place. This fee goes directly to the venue and customers cannot avoid paying this fee. Order-processing fees provide the most issues for customers. These fees are tacked on when buying tickets online and have no rhyme or reason to their price. This type of fee can typically be waived when purchasing tickets at a box office, but that is an unfavorable option in our tech-reliant society. Ticketmaster explains the order processing fee as a way to “offset the costs of ticket handling, shipping, and support.” But the fact of the matter is that a lot of these fees are not explained clearly enough at the time of a customer’s purchase.

In 2010, Ticketmaster promised to provide transparent ticket pricing. StubHub followed in 2014 with an “all-in” pricing model. However, transparent pricing did not make sales cheaper for customers. Websites that offer “no fee tickets” simply mark up the face value of the ticket to include all of the extra charges. While this seems more honest to customers, it is difficult to determine if these “transparent” fees are reasonably priced. Ticket sale regulations require that mandatory fees are clearly disclosed to purchasers, but these regulations do not determine how much a company can charge. Yearly, the ticketing industry collectively charges consumers more than $1.6 billion in fees, with limited policies regulating such income.

Due to their service fees, online ticket retailers have been the subject of state and federal scrutiny. For example, the New York State Attorney General, Eric T. Schneiderman, released a report stating that “excessive fees with an unclear purpose are impermissible under the law and constitute evidence of abuse of monopoly power.” Since early 2018, the Department of Justice has been investigating Live Nation for possible violations of antitrust law. A suit has already occurred in Canada where Canada’s Competition Bureau sued Ticketmaster for deceptive “drip pricing.” The Competition Bureau claimed that Ticketmaster gradually added additional costs throughout their purchasing process, which is forbidden under Canada’s consumer protection laws. Ticketmaster settled the suit and was required to pay the Competition Bureau $4.5 million. In June 2019, Ticketmaster released a statement regarding this suit and said they would re-organize their website; however, nothing was mentioned regarding a change to their expensive and hidden service fees.

It would not be surprising if class actions ensued claiming that ticket service fees violate federal or state Consumer Protection Laws. For example, in Massachusetts, the Consumer Protection Laws prohibit companies from using “unfair or deceptive practices.” Massachusetts consumers are permitted to sue companies under Chapter 93A if the consumer believes that she lost money as a result of a company’s deceptive act. First, online ticket retailers are failing to disclose the details pertaining to their service fees. Second, prices vary throughout the ticket retail websites and there is no ceiling on the fees the company can charge. Third, these companies also cutout the human aspect of ticket purchasing, so customers are paying for “services” which they are not actually receiving. Lastly, customers are forced to pay service fees or they will not receive their tickets. All of these reasons directly contradict the policy rationale of Chapter 93A, thus, providing a cause of action for a proper lawsuit.

The daily reliance on technology will make it less likely that consumers cease purchasing tickets online. One possible solution is to have websites, like Ticketmaster, create subscription programs similar to Amazon Prime, where all fees are waived in return for membership. Ticket retail companies could also waive fees by promoting ticket purchases solely through their mobile apps. In any solution, it would be wise for companies to lower their service fees to increase business and consumer praise. In order to obtain any type of change, there needs to be a movement from consumers to publicize their confusion and distrust with service fees. Recently, close to 7,000 people, wrote to the Federal Trade Commission regarding their complaints about online ticket service fees. Consumer Reports has a website called “What the Fee?!” where consumers can make written complaints on the unfair fees that they have encountered. Most importantly, the courts and legislation need to get involved. Legal action will make consumers’ complaints heard. There is a clear deceptive practice occurring in online ticket retail, and regulation is needed, or else consumers will continue to pay unfair prices for entertainment.

Student Bio: Jillian Dahrooge is a second-year law student at Suffolk University Law School who is pursuing a concentration in Intellectual Property. She is also a staff member of the Journal of High Technology Law. She currently holds a Bachelor of Arts Degree in American Studies and a minor in Human Development from Connecticut College.

Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.

 

 

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