Stub Hub Wins “Safe Harbor” Dismissal in Scalping Case

I’ve previously blogged here about the economics of scalping, and my belief that anti-scalping laws prevent beneficial markets. So, I’m glad to see Stub Hub win a case which sets a precident for it to receive protection as an online service.

In January a class action law suit was brought against Stub Hub and its owner eBay. The complaint’s gist was that Stub Hub and its owner eBay profited by and encouraged scalping, which is a criminal offense in Oregon. The class of “disappointed fans” sought damages based on the increased price of tickets created by the secondary market which Stub Hub has built.

Judge Marilyn Litzenberger ruled that the claim was not supported by Oregon law, which does not provide civil penalties for scalping. Then she further ruled that Stub Hub would be immunized from scalping liability due to the Communications Decency Act’s Section 230 “safe harbor” provision for internet service providers.

Judge Litzenberger’s extention of Section 230 protection to Stub Hub will certainly be cited in future cases. It may also encourage franchizes to create their own secondary “fan-to-fan” markets, and for media outlets such as ESPN to partner with Stub Hub.

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