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Companies pledge to Biden they'll eliminate 'junk fees'

The ticketing industry has long added hidden fees just before checkout. Some companies pledged to President Biden they are ending that practice.
Companies pledge to Biden they'll eliminate 'junk fees'
Posted at 5:40 PM, Jun 15, 2023

President Joe Biden assembled leaders from several ticketing and travel companies who pledged to end the practice of hidden or "junk" fees.

The meeting came about four months after President Biden called out the practice of adding hidden fees just before completing a transaction online. 

Representatives from Live Nation, SeatGeek, xBk, Airbnb, the Pablo Center at the Confluence, TickPick, DICE and the Newport Festivals Foundation met with President Biden on Thursday. 

Live Nation announced a commitment to roll out "upfront all-in pricing" for tickets to shows at its venues and festivals starting in September. Live Nation's parent company Ticketmaster will add the feature for all other tickets it sells. 

SeatGeek, which acts as both a direct and resale ticket seller, said it will make it easier for customers to shop on the basis of an all-in price.

“These are just the latest private sector leaders who are responding to my call to action," President Biden said during the meeting, and reiterated that junk fees "can add hundreds of dollars a month and make it harder for families to pay their bills.”

“I’m asking their competitors to follow suit and adopt an all-in pricing as well," President Biden said. “These actions matter and it’s inspiring companies to change their practices.

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Earlier on Thursday, the White House said that the companies' "voluntary actions demonstrate that companies both big and small recognize the importance of providing consumers with honest, up-front all-in pricing, rather than tricking them with surprise fees at the end of checkout."

President Biden also reiterated his call on Congress to "pass legislation that mandates up-front all-in pricing for all ticket sellers, bans surprise 'resort fees,' eliminates early termination fees charged by cable, internet, and cellphone companies, and bans family seating fees."

The White House pointed to research from the University of Duesseldorf that found that these pricing practices lead customers to pay more than they otherwise would.

"Previous studies, mostly focusing on just the buyer side of the market, have found this to be harmful, causing buyer confusion and discouraging price search," the researchers said. 

"We find that the practice of drip pricing has a negative effect on buyers even if they are well informed about the use of drip pricing and the maximum drip a seller may charge. Total prices are lower and buyer surplus higher if sellers are required to charge a transparent price," they added. "Also in cases in which buyers are less well informed about the extent of drip prices, we find anticompetitive effects of drip pricing. In this case, drip pricing may be more detrimental to consumers, as the number of mistakes increases and consumers fail to identify the cheapest seller more often."

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