The Competition Tribunal has ruled in favour of the Competition Bureau, finding that Cineplex engaged in deceptive marketing practices by applying an undisclosed $1.50 online booking fee on its website and mobile application.
The tribunal found that Cineplex’s representations of ticket prices were misleading, constituting "drip pricing" under the Competition Act. This ruling marks the first case in which the tribunal has applied the recently enacted subsection 74.01(1.1) of the act, which addresses the practice of drip pricing.
Drip pricing occurs when a business advertises a lower price for a product or service but includes mandatory fees during the purchase process, making the advertised price unattainable. In this case, consumers purchasing tickets through Cineplex’s online platforms were charged an additional booking fee, which was not required for in-person purchases at Cineplex theatres. The tribunal concluded that the online ticket prices were incomplete and misleading, as they did not reflect the full cost, which included the mandatory booking fee.
The tribunal ordered Cineplex to pay a financial penalty of over $38.9 million, equivalent to the total amount collected from consumers from introducing the booking fee from June 2022 to December 2023. Additionally, Cineplex is required to cover a portion of the legal fees and disbursements incurred by the Competition Bureau. The tribunal also prohibited Cineplex from engaging in similar deceptive practices for the next 10 years.
Competition Commissioner Matthew Boswell praised the decision, stating, "The Tribunal's decision in the Cineplex case is a resounding win for Canadians. It sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront. Businesses that fail to comply with the law risk significant financial penalties."
This case follows amendments to the Competition Act, which explicitly recognize drip pricing as a harmful business practice. Since these changes took effect in June 2022, the Competition Bureau has taken significant action against various industries, including car rentals and online ticketing, to combat deceptive pricing practices.