StubHub, CEO hit with class action for ‘deceptive practices’ over massive scalping
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StubHub and its CEO, Eric Baker, have been hit by a proposed $5-million class-action lawsuit in the United States regarding the company’s relationship with major scalpers – a connection reported by CBC News last week.
The lawsuit, filed Monday by New York ticket buyer Louis Sanquini, alleges deceptive practices and misrepresentations by StubHub’s self-promotion “as a marketplace for fans to buy and sell tickets.”
The online ticketing giant has faced a barrage of customer complaints after canceling thousands of World Cup tickets. The company has repeatedly stated that it is simply a technology platform that does not buy, sell or own tickets.
However, CBC reported last week that Baker disclosed in recent filings with the US Securities and Exchange Commission that he runs Andro Capital, a hedge fund that makes multimillion-dollar sales of sports and concert tickets on resale site StubHub.
Sanquini filed a proposed class action in the Southern District of New York, arguing that consumers were kept in the dark and that he believed StubHub was a “neutral” marketplace.
Lead attorney Kevin Steinberg told CBC News in an emailed statement that “consumers deserve honesty and transparency.”
A CBC investigation has found that the CEO of online ticket seller StubHub owns and operates a hedge fund that is investing millions of dollars in its tickets.
“Although what StubHub allegedly involved and did to millions of patrons is unclear, this case is about transparency and consumer trust. When companies make representations to the public, consumers have the right to expect that those proposals are complete and accurate,” he said.
The lawsuit reads: “Defendants’ failure to disclose this conflict of interest, while ensuring to market StubHub as a follower marketplace, misled Plaintiff and the Class and caused them to pay amounts, and accept terms, they would not have accepted had the truth been known.”
Sanquini says that if he had known that StubHub’s CEO had a financial interest and that the company was helping fund professional sellers, he would not have used the resale site to buy tickets to see the rock band Kiss in 2023 or to attend the New York Red Bulls-New York City FC Major League Soccer game in 2024.
A StubHub spokesperson wrote to CBC in an email late Monday: “Thank you for reaching out to the public, but we will not comment on the legal matter.”
None of the allegations have been tested in court.
The cancellation of the World Cup will be considered
StubHub has faced increased scrutiny and is seeking an external investigation after canceling thousands of World Cup ticket orders without a “Fan Protection Guarantee.”
Many disappointed customers said that despite being promised refunds or replacement tickets, they were locked out of World Cup matches at the last minute and left out of pocket for travel and hotel expenses, missing out on what some described as a “once in a lifetime” opportunity.
The situation has resulted in multiple complaints to the US Federal Trade Commission and Canada’s Competition Bureau, and has prompted official investigations by Consumer Protection BC and the Texas Attorney General’s office.
