Have you ever logged on to Ticketmaster.com in anticipation of getting tickets to your favorite artist and then were shocked to see the price tag was higher than expected? First, you select the best seats based on your budget, say around $100, then click add to cart, and finally go to enter your credit card information and all of a sudden that $100 ticket is now close to $150. These undisclosed fees that surprise customers when checking out are known as junk fees.
Fees like these leave customers paying a higher price tag than planned, purchasing at a lower tier than they prefer, or even ditching the purchase all together. These fees can really add up, especially when families or groups are purchasing multiple tickets for one event. In a 2018 report on event ticket sales, the United States Government Accountability Office found that, in a review of 31 different sporting events across five ticket sellers’ websites, customers were charged total fees averaging 27 percent to 31 percent of the ticket’s price.
In September 2022, at the meeting of the Competition Council, President Biden urged agencies to focus on reducing junk fees through regulatory action. Since September, agencies have listened and started to set new regulations to reduce the fees customers are being charged. There has been progress in reducing junk fees in the airline and banking industries. The Consumer Financial Protection Bureau (CFPB) issued guidance to help banks avoid charging illegal junk fees such as overdraft fees even though there were sufficient funds, or depositor fees charged when you deposit someone else’s bounced check. The White House noted that changes like these will reduce fees by more than $1 billion annually. The Department of Transportation also proposed a rule to require airlines and online booking services to show the full price of a plane ticket up front and stop adding on fees throughout the purchase process.
Regulations like these are contributing to the reduction or elimination of junk fees using existing authority, but President Biden has now called on Congress to pass the Junk Fee Prevention Act to eliminate these unfair and costly fees by codifying the regulations. The Junk Fee Prevention Act focuses on eliminating “excessive” online concert, sporting event, and other entertainment ticket fees; airline fees for family members to sit with young children; early termination fees for TV, phone, and internet service; and surprise resort and destination fees.
Last week in President Biden’s State of the Union address, he stated, “Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in. They add up to hundreds of dollars a month, I know how unfair it feels when a company overcharges you and gets away with it. Not anymore.” The Consumer Protection Bureau estimates consumers spend at least $29 billion each year on junk fees.
Junk fees not only harm the consumer, they also harm market competition. Junk fees are used to stifle competition by disguising the “all in” price that a customer will pay and creating more work for the customer to “price shop” since they don’t find the “all in” price till the checkout process is almost complete. Primary ticket markets usually only offer one online option for making an initial purchase for an event, meaning that the customer cannot avoid large fees. So if you really want to see your favorite artist or sporting event, you are forced to pay the fees or attempt to buy off the secondary market which can be more expensive in some cases. Live Nation, a company that promotes, operates, and manages ticket sales for live entertainment globally, has exclusive partnerships with 80 of the top 100 arenas in the United States. With these exclusive partnerships, Live Nation has the ability to charge excessive fees, with no fear of competition, and the customer is left paying the bill or choosing not to attend because it costs too much. Live Nation has already been under scrutiny over charging exorbitant fees. According to CNN, the company said it supports reform, but it opposes the proposed legislation.
The Biden-Harris Administration hopes that Congress can come together in the coming weeks to reduce junk fees that take cash out of Americans’ pockets and hide the true cost of products.
 United States Government Accountability Office, 2018. Event Ticket Sales, Market Characteristics and Consumer Protection Issues