What is up with all those fees tacked onto ticket prices?
When purchasing tickets online for live events like concerts, sports games or plays, it's a question that ticket buyers often find themselves asking when hit with a variety of "service fees", "delivery fees", "processing fees" and other assorted charges. As we've previously blogged about, these fees, often not added until the final steps of the check-out process, have long drawn scrutiny at the FTC and NAD.
New York has now become the first state to pass legislation specifically addressing price transparency in ticket markets. The intent of the new law is to prohibit pricing practices that could mislead or deceive ticket buyers. Passed by Gov. Hochul in June, the new law (S.B. 9461) goes into effect on August 29.
What transparency measures are required under the new law? Here are some major takeaways:
- "All-In" Pricing. Ticket sellers commonly use "drip" pricing practices in which ticket prices are subject to increase during the course of the purchase process as taxes and fees are added. Under the new law, ticket sellers will instead be required to adopt an "all-in" pricing model in which the total ticket cost must be disclosed before the ticket is selected for purchase – inclusive of any service charges or other fees. Other than for delivery fees (as discussed below), the price of the ticket must not increase during checkout.
- Price Itemization. Prior to the ticket being selected for purchase, ticket sellers must show a breakdown of the total ticket cost, identifying the base price of the ticket and clearly and conspicuously disclosing the amount of any mandatory fees. Fee disclosures cannot be misleading or false and the itemized components of the total price cannot be presented more prominently or in a larger font than the "all-in" cost.
- Delivery Fees. Delivery fees cannot be charged for tickets delivered electronically or to be printed at home by the purchaser. However, if the purchaser chooses to have physical tickets delivered, ticket sellers may still charge a fee for the "reasonable and actual" cost of delivery.
- Ticket Resale. If tickets are being re-sold online for a price greater than the base price charged by the venue operator, the online secondary ticket marketplace must disclose the original, base price in addition to the resale price.
- Free Tickets. The new law prohibits tickets that were initially offered for free to the public from being re-sold at a profit.
The new law covers tickets sold by online ticket platforms (such as Ticketmaster or Stubhub) as well as individual venues such as nightlife establishments, clubs and theaters that sell tickets directly to consumers. The law's requirements apply to tickets for "all forms of entertainment" (including theater, concerts, movies, amusement parks, sports games and more).
Back at the FTC's Online Event Tickets Workshop in 2019, representatives of Ticketmaster, Stubhub and other major ticketing platforms expressed concern that without clear and uniform regulatory guidance, the industry's pricing practices would continue to suffer from a collective action problem in which no individual platform would have incentive to unilaterally adopt increased transparency measures that may put it at a competitive disadvantage relative to other players in the industry. New York's new law may be a good first step toward the uniform adoption of more consumer-friendly ticket pricing practices.
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