Drip Pricing: StubHub Enters into $1.3M CAD Consent Agreement with Canadian Competition Bureau

On February 7, 2020, StubHub Canada Ltd. and StubHub Inc. (collectively “StubHub”) entered into a consent agreement with the Competition Bureau (the “Bureau”) in Canada, after the Bureau’s investigation concluded that StubHub was advertising unattainable ticket prices on its websites, emails and mobile app to Canadian consumers. At issue were non-optional charges such as transactional fees, delivery fees and other additional fees that were added to the initial advertised ticket prices at the end of the checkout process. As a result, the final ticket price could be significantly higher than the original advertised price.

In the Bureau’s view, disclosing the additional fees at the later stages of the transaction was not sufficient to prevent the initial price representations from being considered false and misleading in a material respect. Since 2015, StubHub had offered consumers the option of using a toggle feature; when turned on, the consumer would see the ticket prices with the fee estimates included. However, the Bureau noted that in some instances the final price paid was higher than the estimated price displayed with the toggle feature. The Bureau therefore concluded that StubHub could not rely on the toggle to accurately show the full cost of a ticket and correct the general impression.

As a part of the consent agreement, StubHub has agreed to:

(1) pay a $1.3 Million CAD administrative monetary penalty to the Bureau;

(2) include all mandatory fees within the ticket prices the first time they are advertised or shown;

(3) give Canadians searching for tickets on stubhub.com the express choice to be redirected to the stubhub.ca websites; and

(4) establish a corporate compliance program and implement new procedures to comply with the Competition Act.

Advertised prices continue to be on the Bureau’s radar, and this matter is yet another example of the Bureau’s focus on advertising practices in the growing digital economy. If you have any questions about this consent agreement or how to make compliant pricing claims in Canada, reach out to Miller Thomson’s Marketing, Advertising and Consumer Product Regulatory Group.