Suit claims that drip pricing increases the cost of tickets online at Canada’s largest theater operator
GATINEAU – The Competition Bureau is taking legal action against Cineplex for advertising movie tickets at a lower price than what many consumers actually have to pay. The Bureau alleges that Cineplex is breaking the law by adding an additional fee that raises the price of its tickets purchased online.
A Bureau investigation found that many consumers cannot buy tickets on Cineplex’s website or mobile app at advertised prices because it adds a mandatory $1.50 online booking fee to the price of a ticket. The Bureau alleges that Cineplex’s online booking fee is an example of misleading drip pricing (sometimes referred to as a junk fee).
Recent amendments to the Competition Act explicitly recognize drip pricing of mandatory charges or fees as a harmful business practice. Drip pricing is considered to be false or misleading under the law, unless the additional fixed charges or fees are imposed by the government, such as sales tax. The Bureau is alleging that since Cineplex introduced the online booking fee in June 2022, it has generated significant revenues for the company. The Bureau has filed an application with the Competition Tribunal seeking, among other things, for Cineplex to:
- stop the deceptive advertising
- pay a penalty; and
- issue restitution to affected consumers who purchased tickets through Cineplex’s website or app.
“Consumers expect to pay the advertised price. We’re taking action against Cineplex because misleading tactics like drip pricing only serve to deceive and harm consumers. For years, we have urged businesses, including ticket vendors, to display the full price of their products upfront. I remind all businesses to review their pricing claims to make sure they do not mislead consumers.” – Matthew Boswell, Commissioner of Competition