When a widespread industry practice comes under regulatory
scrutiny, companies that end up in the crosshairs sometimes fall
back on the “everyone does it” defense. This argument
has an intuitive appeal in the consumer-protection
context—consumers are presumably aware of practices that are
common across an entire industry, the thinking goes, and they make
purchasing decisions with knowledge of these practices.
The online ticket reseller StubHub recently tried this approach
at NAD. It didn’t go over so well.
NAD launched an inquiry into StubHub’s fee-disclosure
practices to determine whether consumers were being misled about
the total cost of tickets sold on the site because StubHub does not
disclose the service fees when it initially displays the ticket
price. StubHub discloses the fees, which can range from 24% to 29%
of the ticket cost, only at the time of checkout, after the
consumer has already made the decision to buy the tickets. NAD was
concerned that
