Junk Fees
The new “junk fee” rules passed by the Federal Trade Commission (FTC) to clean up the event ticket industry won’t slow the rising price of concert tickets or reduce the huge fees added by ticketing companies, a group of prominent music agents and managers is warning.
In a letter to the FTC last week, Nathaniel Marro, executive director of the National Independent Talent Organization (NITO), said the new rules are “a positive step forward” in cleaning up the business but that they do “nothing to reduce the junk fees buried inside each concert ticket.” NITO is now asking the FTC to expand its ruling to address its concerns.
So-called junk fees, which are added to a ticket purchase by ticketing companies like AXS and Ticketmaster, regularly push ticket fees up 25% to 30%, often without any sign-off from the artist, says Marro.
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“The artist is kept in the dark about how much their fans are being charged in fees for tickets,” Marro wrote in the letter. “We don’t know the fees in advance. Most agents, and artists and managers don’t see the full spread of fees until the show goes on sale.”
Some of the fees also aren’t accounted for during show settlement, Marro added, meaning that most artists don’t know how much revenue ticketing companies are making from their concerts.
Officials with Live Nation pushed back on this claim, telling Billboard that “if an artist team is ever unsure of the venue fees, it’s a simple ask that the venue rental agreement outline it,” adding, “this is never hidden as it’s a standard cost of doing business.”
Marro worries that the FTC’s new requirements that fans be shown the full price of a ticket upfront –instead of first being shown the face value before fees are tacked onto the price at checkout — will make it easier for ticketing companies to add fees to the face value of a ticket while effectively hiding them, resulting in higher ticket prices.
Recent data from Billboard Boxscore shows that ticket prices are rapidly increasing. The average cost of a concert ticket to one of the tours on Billboard’s Year-End top 100 tours chart last year was $132.30, marking an increase of 9.1% from 2023 and a 20.6% increase from 2022. Prior to the pandemic, ticket prices were increasing at a much more sustainable rate of just 3% to 4% a year.
In a statement to Billboard explaining its support for mandatory all-in pricing, Live Nation said that “fans are better off when they focus on the true cost of a ticket, which is the sum of face value and all mandatory fees. There is no basis for obscuring the all-in price on the fiction that artists do not understand ticket fees. That information is never hidden as the NITO comments suggest. It is readily available to artist teams, who also know that most ticket fees go to the venues hosting their events.”
StubHub is facing a lawsuit from Washington DC’s attorney general over allegations that the ticket resale platform foists “convoluted junk fees” on concertgoers after luring them in with “deceptively low prices.”
In a complaint filed Wednesday, Attorney General Brian Schwalb accuses StubHub of violating the District’s consumer protection laws by using the “drip pricing” — an “exploitative pricing scheme” in which a company requires consumers to pay fees that weren’t advertised in the initial price.
“For years, StubHub has illegally deceived District consumers through its convoluted junk fee scheme,” Schwalb said in a statement announcing the case. “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.”
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The “hidden” fees imposed by StubHub total “upwards of 40% of the advertised ticket price,” the lawsuit claims, and DC consumers have allegedly paid $118 million in such fees since 2015.
In a statement, StubHub said the company was “committed to creating a transparent, secure and competitive marketplace” for its customers. “We are disappointed that the DC 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.”
Consumers have complained for years about “convenience” and “service” fees that are tacked onto the price of tickets for concerts and other live events. Laws requiring “all-in pricing” — the full, final cost, presented at the beginning of a sale — have been enacted by New York, California and other states in recent years. A federal bill (Transparency in Charges for Key Events Ticketing, or TICKET, Act) was passed by the House of Representatives in May and is awaiting a vote in the Senate.
Hidden fees are also a key accusation in the pending antitrust lawsuit against Live Nation filed by the Department of Justice earlier this year. In that case, the DOJ has argued that such fees levied by Ticketmaster on American concertgoers “far exceed” those in other countries.
“Any fan who has logged onto Ticketmaster’s website to buy a concert ticket knows the feeling of shock and frustration as the base cost of the ticket increases dramatically with the addition of fees,” the DOJ wrote in its complaint against Live Nation. “Whatever the name of the fee and however the fees are packaged and collected, they are essentially a ‘Ticketmaster Tax’ that ultimately raise the price fans pay.”
In Wednesday’s lawsuit, Schwalb argues that StubHub imposes those same fees on its customers. Calling it a “a classic bait-and-switch scheme,” the lawsuit claims the final price of a StubHub ticket is only revealed after customers have “invested time and effort clicking through an intentionally long, multi-page purchase process” — which features a countdown clock to “create a false sense of urgency.”
“StubHub designed this unfair and deceptive scheme to make more money,” Schwalb wrote. “By forcing consumers to click through over a dozen pages before they see the real price, StubHub puts consumers in the position of having to choose between either paying those unexpected fees or abandoning the time and effort they have expended.”
In addition to springing such fees at the end of a transaction, the lawsuit also accuses StubHub of choosing deceptive names for them — a claim that echoes longstanding complaints about what vaguely-named ticketing fees imposed by many companies actually cover.
“What StubHub identifies as ‘Fulfillment and Service Fees’ are in fact influenced by factors unrelated to ‘fulfillment’ or ‘service,’” the lawsuit reads. “Furthermore, the fees vary wildly, and StubHub never discloses to the consumer how those fees are calculated or what services these fees fund.”
Read the entire lawsuit against StubHub here:
The Federal Trade Commission on Wednesday proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills. President Joe Biden has made the removal of these fees a priority of his administration. The Democrat’s effort has led to a legislative push […]
WASHINGTON (AP) — President Joe Biden is hosting executives from Live Nation, Airbnb and other companies at the White House on Thursday to highlight his administration’s push to end so-called junk fees that surprise consumers. Biden prioritized the effort to combat surprise or undisclosed fees in his State of the Union address and has called […]
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