Cineplex ordered to pay a record penalty of
nearly $39 million
dollars
GATINEAU, QC, Sept. 23,
2024 /CNW/ - Today, the Competition Tribunal ruled
in favour of the Competition Bureau and found that Cineplex
engaged in drip pricing by adding a mandatory $1.50 online booking fee.
The Tribunal determined that the representations on Cineplex's
website and mobile application constituted drip pricing and that
consumers were deceived by contradictory and incomplete information
on Cineplex's tickets page.
As part of its ruling, the Tribunal ordered Cineplex to pay a
financial penalty of over $38.9 million
dollars and legal costs. The penalty is equivalent to the
amount Cineplex collected from consumers from the introduction of
the online booking fee in June 2022
until December 2023.
Consumers are entitled to clear information, and should never be
surprised by hidden or additional fees. When businesses engage in
false or misleading practices, it harms competition and businesses
who comply with the law.
Quote
"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."
Matthew Boswell
Commissioner of Competition
Quick Facts
- The Tribunal ordered Cineplex not to engage in the conduct or
similar conduct for a period of 10 years.
- Following an investigation, the Bureau filed an application
with the Competition Tribunal, on May 18,
2023, seeking, among other things, for Cineplex to stop its
deceptive advertising.
- Amendments to the Competition Act came into force on
June 24, 2022, which explicitly
recognize drip pricing as a harmful business practice.
- Drip pricing involves offering low prices to attract consumers,
but then adding mandatory fees so that the prices are unattainable.
This practice is against the Act, unless the additional
fixed charges or fees are imposed by the government on purchasers,
such as sales tax.
- The Bureau has taken action against drip pricing for many years
under the Deceptive Marketing Practices provisions of the
Competition Act, notably in the car rental, satellite radio
subscriptions, online sporting and entertainment ticketing
industries.
- The Bureau recently issued a consumer alert to raise awareness
and reporting of drip pricing.
- We strongly encourage anyone who suspects that a company or
individual is making false or misleading price claims to report it
by using the Bureau's online complaint form.
Related Products
- Competition Tribunal Cineplex Information Note
- Cineplex - Notice of Application
- Recent changes to the Competition Act explicitly
recognize drip pricing
Associated Links
- Drip pricing and the Competition Act
- Deceptive marketing practices – Cases and outcomes
- Consumer and business alerts
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The Competition Bureau is an independent law enforcement agency
that protects and promotes competition for the benefit of Canadian
consumers and businesses. Competition drives lower prices and
innovation while fueling economic growth.
SOURCE Competition Bureau