StubHub files lawsuit against Ticketmaster and the Golden State Warriors over monopolistic practices

StubHub, the eBay-owned secondary ticket marketplace for live events, has announced that it’s filing a lawsuit against fellow ticketing company Ticketmaster and NBA basketball team the Golden State Warriors.

The suit seeks to stop “unfair and illegal anti-competitive business practices that prevent fans from deciding how they want to resell their tickets and which artificially drive up ticket prices,” according to the StubHub statement.

As the official primary and secondary ticketing partner of the NBA since 2007, Ticketmaster has tightly aligned itself with U.S. basketball for a while already. But it’s the secondary element to the deal that is key here — it means that basketball fans who buy tickets on Ticketmaster but subsequently can’t attend the game can sell their tickets through the team’s website using Ticketmaster’s TicketExchange service.

Founded out of San Francisco in 2000 by former Stanford Business School students and investment bankers, StubHub became a major force in the online ticketing space throughout the noughties, which led to its acquisition by eBay in a $310 million deal back in 2007. Its raison d’être is the “secondary” market — a place for people to resell tickets to any live events.

While StubHub is used legitimately by people to reclaim their money for events they can no longer attend, it has also garnered a reputation as a platform for scalpers — ABC recently said it has become the “ticket scalper of the digital age, the ultimate middleman to shake up the way people interact to buy and sell tickets to almost any concert, theater performance, or sporting event.”

And this is where the crux of the problem sits for StubHub in its gripe against Ticketmaster and Golden State Warriors. As per the lawsuit, which you can read in full here, Ticketmaster and the Golden State Warriors cancelled fans’ season tickets and playoff-game tickets when they elected to use StubHub and “other competitive exchanges” to resell their tickets. “Ticketmaster and the Warriors’ front office broke the law by unlawfully threatening fans with cancellation to force them to use Ticketmaster’s resale exchange exclusively,” the complaint reads.

In effect, StubHub is accusing Ticketmaster of being monopolistic — and this isn’t the first time such accusations have been levied against Ticketmaster. Before its merger with venue operator Live Nation, many bodies voiced their concern that it would reduce competition, and also lead to Ticketmaster favoring Live Nation venues over ones that elect to use alternative ticketing companies. Such actions were forbidden, however, as part of the eventual green light this deal was given in 2010.

It will be interesting to see how this one plays out. On the one hand, the Golden State Warriors has had an exclusive secondary ticketing deal with Ticketmaster since 2012, but on the other hand StubHub points to anti-competition law that it says is being broken here. It’s likely there will be many more twists and turns before this arrives at an amicable conclusion.