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The Federal Trade Commission has proposed a new rule that would ban companies from hiding fees until the end of a purchase — a move that could bring more transparency to the buying process across several industries, including the concert business.
For years, music fans have taken issue with ticketing companies, like Ticketmaster and StubHub, for initially listing tickets at one price only to reveal the actual price, including fees just before checkout, hiding costs that sometimes amount to hundreds of dollars. This so-called “drip-pricing” — which is also common when booking airline tickets and hotel rooms — is often misleading for customers. While the FTC’s proposal won’t stop the prices themselves, it would create more transparency for customers as companies would have to show the actual price they’ll pay from the start.
“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year—money that corporations are extracting from working families just because they can,” FTC Chair Lina M. Khan said in a statement. “By hiding the total price, these junk fees make it harder for consumers to shop for the best product or service and punish businesses who are honest upfront. The FTC’s proposed rule to ban junk fees will save people money and time, and make our markets more fair and competitive.”
The proposal comes after several live music companies, including Live Nation Entertainment (which owns Ticketmaster), SeatGeek, and TickPick, announced over the summer alongside President Joe Biden that they would commit to all-in pricing.
Ticketing companies have said for years that they advocate for all-in pricing but that they could only commit to the practice if the government required it because those who wouldn’t commit would have a competitive advantage as their prices would initially look cheaper.
“This is a win for consumers in my view, and proof that our crackdown on junk fees has real momentum,” Biden said at the time.
The FTC said in its proposal announcement that the rule would ban both hidden fees and “bogus fees” that mislead consumers about what the fee actually is intended to cover. The FTC said the rule would require companies to disclose both the fee itself and the fee’s purpose.
The FTC said the rule would also have “enforcement teeth” and that companies would be forced to issue refunds and would face unspecified monetary penalties if they don’t comply with the provisions.
Enforcement has historically been difficult in the ticketing business; as Rolling Stone previously reported, even as states like New York passed legislation requiring ticket fee disclosure up front, several ticketing companies had been skirting that rule.
Senator Amy Klobuchar, Chairwoman of the Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, applauded the proposal, calling it”an important step towards ensuring that the price you see is the price you pay.”
“From buying a concert ticket to booking a flight, hidden fees are a constant challenge for consumers trying to make informed decisions on big purchases,” Klobuchar said in a statement. “We must put an end to these surprise costs so that consumers have the transparency they need and deserve.”
