StubHub and its CEO, Eric Baker, are facing a $5-million proposed class-action lawsuit in the U.S. for their alleged connections with large-scale scalpers, as revealed by CBC News recently. The lawsuit, initiated by New York ticket purchaser Louis Sanquini on Monday, accuses StubHub of deceptive practices and misrepresentation by presenting itself as a “marketplace for fans to buy and sell tickets.”
Despite StubHub claiming to be solely a technology platform without involvement in ticket transactions, recent filings with the U.S. Securities and Exchange Commission disclosed that Baker manages Andro Capital, a hedge fund engaged in significant ticket resales on the StubHub platform.
Sanquini filed the class action in the Southern District of New York, asserting that consumers were misled into believing StubHub was a neutral marketplace. Lead counsel Kevin Steinberg emphasized the importance of honesty and transparency for consumers in a statement to CBC News.
The lawsuit contends that StubHub’s failure to disclose its conflict of interest while marketing itself as a fan-to-fan marketplace led consumers to pay prices and accept terms they would not have agreed to if they had known the truth. Sanquini expressed that had he been aware of the CEO’s financial interest and the company’s support for professional resellers, he would not have used StubHub to purchase tickets for events like a rock concert in 2023 or a Major League Soccer match in 2024.
In response to the legal matter, a StubHub spokesperson declined to comment in an email to CBC. It is important to note that the allegations have not been tested in court.
Furthermore, StubHub has come under increased scrutiny for canceling numerous World Cup ticket orders despite its “FanProtect Guarantee.” This action has resulted in customers being left without tickets, refunds, or replacement tickets, causing financial losses and missing out on what was deemed a unique opportunity. The cancellations have led to complaints to regulatory bodies such as the U.S. Federal Trade Commission, Canada’s Competition Bureau, Consumer Protection B.C., and the Texas Attorney General’s office.