Cineplex Inc. has been fined a record $38.9 million by the Competition Tribunal for deceptive marketing practices related to online booking fees for movie tickets. The tribunal sided with the Competition Bureau, which accused Cineplex of misleading customers by not immediately showing the full price of a movie ticket when purchased online. The tribunal described the information on Cineplex’s tickets page as contradictory and incomplete, leading to deception about the existence and amount of the online booking fee of $1.50.
The Competition Bureau alleged that the online booking fee charged by Cineplex constituted “price dripping,” a practice where customers are drawn into a purchase without full disclosure of the final cost. Cineplex denied these accusations and maintained that moviegoers are informed about the fees they may face and have the option to avoid them by purchasing tickets in-person at the theatre. Despite the tribunal’s ruling and fine, Cineplex expressed shock at the decision and insisted that the online booking fees were clearly and prominently displayed on its website and app.
The $38.9 million fine imposed on Cineplex is equivalent to the amount collected from consumers through the $1.50 online booking fee between June 2022 and December 2023. In addition to the fine, the tribunal ordered Cineplex not to engage in similar conduct for a period of 10 years. The Competition Bureau sees this ruling as a victory for consumers and businesses, emphasizing the importance of displaying full prices upfront and avoiding drip pricing practices. The bureau was aided by amendments to the Competition Act in June 2022, which recognized drip pricing as a harmful business practice.
Cineplex plans to appeal the tribunal’s decision, asserting that they believe their guests make informed purchase decisions and that the online booking fees are presented in compliance with the law. The company’s statement indicates its dissatisfaction with the ruling and its intention to challenge the fine and restrictions imposed by the tribunal. The Competition Bureau has not yet responded to Cineplex’s announcement of an appeal, but they stress the significance of businesses complying with the law to avoid substantial financial penalties.
The tribunal is expected to provide more detailed reasoning for its decision and order in the coming week, once any confidential or competitively sensitive information has been redacted in collaboration with the Competition Bureau and Cineplex. The case highlights the importance of transparency in pricing and the consequences for businesses that engage in deceptive marketing practices. The outcome of this case serves as a warning to other companies to ensure clear and upfront disclosure of all costs to consumers to avoid falling afoul of consumer protection laws.
