Ticketmaster Agrees to $400 Million Settlement in Consumer Class-Action Suit
Credit will be offered to 50 million ticket buyers who were charged "order processing fees" that were secretly profit centers for the company.
Ticketmaster has agreed to a tentative settlement in a class-action suit that stretches back more than a decade. If approved, the deal would issue about $400 million in credit to 50 million ticket buyers, according to a report in the Wall Street Journal today.
The lawsuit, originally filed in 2003, alleges that Ticketmaster, now owned by Live Nation but then part of IAC/InterActive Corp., misled consumers by charging "order-processing fees" and a UPS "delivery fee" that the company didn't spend on either.
The suit was filed by five ticket-buying plaintiffs, who were also charged separate "convenience fees" and "facility fees," both of which they understood to be profit centers for Ticketmaster. They were unaware that the other fees were also profit generators for the company, and if they had, they wouldn't have paid them.
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Live Nation has never publicly admitted wrongdoing in the case. A final approval hearing is slated for January in Los Angeles Superior Court. Live Nation expects that the settlement would only cost it $35 million.
As part of the settlement, Ticketmaster changed the language on its website to clarify that order processing and delivery charges may include a profit for Ticketmaster.
Ebay Inc.'s StubHub, the country's biggest ticket reseller, started "all-in pricing" for its tickets this year, advertising the total cost to consumers upfront to eliminate surprise fees at checkout. Live Nation offers upfront pricing as well.
If the Ticketmaster settlement is approved, some 50 million fans in the U.S. who purchased tickets that included an "order-processing fee" on Ticketmaster's website from Oct. 21, 1999, through Feb. 27, 2013, will be eligible to receive a total of $386 million in discounts on future purchases. Ticketmaster will issue up to 161 million credits for $2.25 each and up to 4.9 million credits for $5 each, according to a court document, and will make tickets for certain events available free to class members on a first-come, first-served basis at the end of each year for the next four years if members redeem less than $10.5 million of the coupons each year.
The plaintiffs' lawyers are seeking nearly $15 million in fees, plus up to $1.5 million in expenses.