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Cineplex says it will appeal $38.9M fine over $1.50 online booking fee

Competition Tribunal says online booking fee constituted 'drip pricing'

Kkritika Suri profile image
by Kkritika Suri
Cineplex says it will appeal $38.9M fine over $1.50 online booking fee

Cineplex Inc. has been ordered by the Competition Tribunal to pay a record $38.9-million fine for deceptive marketing practices. However, the ruling does not prevent the theater chain from continuing to charge the online booking fee that sparked the case.

The tribunal's decision, issued late Monday, sided with the Competition Bureau in a case dating back to May 2023. The bureau accused Cineplex of misleading customers by not showing the full price of a movie ticket upfront when purchasing online.

"The consumer is deceived or misled by the incomplete and contradictory information on Cineplex's tickets page, which hides the existence and amount of the online booking fee," the tribunal said in its two-page decision.

Cineplex began charging a $1.50 online booking fee in June 2022 to most customers who were not members of its CineClub subscription service or Scene Plus loyalty program, which offered a waiver or a reduced fee.

The bureau claimed that this fee constituted "drip pricing," a practice where customers are drawn into a purchase without full disclosure of the total cost.

Fee Continues Despite Ruling

The tribunal's ruling does not require Cineplex to stop charging the booking fee. In its statement, Cineplex emphasized that the decision does not impact "the continuation of offering this value-added service to consumers." The issue, the tribunal found, was that the fee was hidden, as the displayed movie ticket prices did not include the booking fee.

"A deceptive marketing case can be unsatisfactory because the fee can still be charged," said Keldon Bester, executive director of the Canadian Anti-Monopoly Project. "They just need to be transparent about it."

The $38.9-million fine represents the amount Cineplex collected through the online booking fee from June 2022 to December 2023. The tribunal also ordered Cineplex to refrain from similar conduct for the next 10 years.

"This sends a clear message that businesses must avoid drip pricing and display full prices upfront," said Matthew Boswell, the commissioner of competition. "Failure to comply with the law can lead to significant financial penalties."

This is the first ruling of its kind since amendments to the Competition Act in 2022, which officially recognized drip pricing as a harmful practice and increased the Competition Bureau’s authority to impose larger fines.

François-Philippe Champagne, Minister of Innovation, Science and Industry, celebrated the ruling as a "win for Canadians" on social media, stating that it validates the recent reforms to the Competition Act.

Public Reaction and 'Junk Fees'

Some moviegoers outside Cineplex's Scotiabank Theatre in Toronto welcomed the ruling.

Nathan Maharaj, speaking to CBC News, called hidden fees "sneaky" and said businesses should present the full price upfront so "we can make our decisions based on what we know the value will be."

"I think a penalty is a good thing," Maharaj said. "It's a warning to others not to try this with their customers."

While transparent pricing allows customers to compare prices more easily across theaters, Cineplex's dominant 75% market share in Canada leaves few alternatives for moviegoers.

Others, however, questioned whether the ruling would make a meaningful difference.

"It's a big fine, but I’m not sure how it affects me as a customer," said Sizhao Shi. "Will I still have to pay the $1.50, or will it just be part of the ticket price?"

Shi pointed out that even though the company was fined, customers might not see any benefit.

Bester noted that while the ruling might deter other companies from using similar tactics, the government should focus on whether these fees are justified, not just how transparent they are.

"The reason we call them 'junk fees' is because we don't see value in the cost, and that's what needs to be addressed," Bester said.

Cineplex Plans to Appeal

Following the tribunal’s ruling, Cineplex expressed its shock, asserting that the online booking fee is "presented clearly and prominently" on its website and app.

"We believe our guests make informed purchasing decisions, and we remain confident our online booking fee is fully compliant with the law," the company stated.

Cineplex has consistently denied the accusations, maintaining that moviegoers are informed about the fee and can avoid it by purchasing tickets in person.

Autumn Gervais, who regularly buys her tickets online, told CBC News that she was unaware of the extra fee.

"I had no idea there were additional charges," she said. "If I knew, I would have bought my tickets in person long ago."

Kkritika Suri profile image
by Kkritika Suri

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