[co-author: Stephanie Kozol]*
California Attorney General (AG) Rob Bonta has settled with StubHub, Inc. (StubHub) for alleged violations of the Unfair Competition Law and False Advertising Law. The complaint accuses StubHub of making misleading statements to induce the public to purchase tickets on its platform. Specifically, the complaint highlights StubHub’s “FanProtect” guarantee, which promised full refunds for canceled events — a promise that StubHub allegedly failed to honor during the COVID-19 pandemic.
According to the complaint that was filed at the same time, StubHub assured consumers up until March 2020, that they would receive refunds for canceled events. However, as the pandemic led to widespread event cancellations, StubHub revised its refund policy, informing consumers that it would no longer provide refunds, contrary to its previous guarantees. The AG states that this sudden policy change left many consumers without refunds for tickets purchased under the original “FanProtect” guarantee, leading to significant financial losses for hundreds of thousands of ticket buyers, including many in California.
To settle these claims, StubHub has agreed to pay $20 million in restitution to over 45,000 California consumers and a $295,000 penalty under California’s Unfair Competition law and California’s False Advertising Law. Virtually all of the restitution was paid while StubHub and the AG negotiated the terms of the settlement.
Why It Matters
The settlement comes on the heels of the Washington, D.C. AG filing a lawsuit against StubHub for separate issues related to pricing. Additionally, earlier this year, the Maryland AG entered a settlement with Royal Caribbean regarding jazz cruise ships that were canceled during the COVID-19 pandemic. The Maryland settlement required the cruise ship company to refund consumers who had purchased tickets for cruises that were ultimately canceled. These lawsuits underscore the increased scrutiny that companies face when they post important terms and conditions that influence consumer purchasing decisions and then do not follow them or change them in an unlawful way. While it is possible to change customer terms and agreements, it must be done properly to avoid exposure.
*Senior Government Relations Manager
