StubHub and its CEO, Eric Baker, are facing a proposed $5-million class-action lawsuit in the United States due to the company’s connections to large-scale scalpers, as highlighted by CBC News recently. The lawsuit, initiated by New York ticket buyer Louis Sanquini on Monday, accuses StubHub of deceptive practices and fraudulent misrepresentation for portraying itself as a “marketplace for fans to buy and sell tickets.”
Despite StubHub’s claims of being solely a technology platform without involvement in ticket transactions, recent disclosures by Baker to the U.S. Securities and Exchange Commission revealed his management of Andro Capital, a hedge fund engaged in significant resale activities on the StubHub platform.
Sanquini filed the class action in the Southern District of New York, alleging that consumers were misled about StubHub’s neutrality as a marketplace. Lead counsel Kevin Steinberg emphasized the importance of honesty and transparency for consumers in a statement to CBC News.
The lawsuit argues that the failure to disclose conflicts of interest while marketing StubHub as a fan-to-fan platform deceived consumers, leading them to accept prices and terms they would have reconsidered if they had known the truth. Sanquini stated that had he been aware of the CEO’s financial interests and the company’s support for professional resellers, he would not have used StubHub to purchase tickets for events like a rock band Kiss concert in 2023 or a New York Red Bulls-New York City FC Major League Soccer match in 2024.
In response to the legal matter, a StubHub spokesperson declined to comment in an email sent to CBC late Monday. It is important to note that none of the allegations have been tested in court.
The cancellation of numerous World Cup ticket orders by StubHub, despite its “FanProtect Guarantee,” has attracted increased scrutiny and demands for an external investigation. Dissatisfied customers claim they were left without refunds or alternative tickets, missing out on World Cup matches and incurring expenses for travel and accommodations. This situation has led to complaints to regulatory authorities such as the U.S. Federal Trade Commission, Canada’s Competition Bureau, Consumer Protection B.C., and the Texas Attorney General’s office.