Cineplex says it will appeal $38.9M fine over $1.50 online booking fee
CBC
Cineplex Inc. has been ordered to pay a record $38.9-million fine by the Competition Tribunal for deceptive marketing practices — but the ruling doesn't stop the theatre owner from continuing to charge the online booking fee that sparked the case in the first place.
The tribunal issued the decision late Monday, siding with the Competition Bureau in a case stretching back to May 2023. That was when the watchdog accused Cineplex of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online.
"The consumer is deceived or led astray by the contradictory and incomplete information on Cineplex's tickets page, which obfuscates the existence and quantum of the online booking fee," the tribunal said in a two-page information outlining its decision.
Cineplex began charging the $1.50 online booking fee in question in June 2022 to many customers not enrolled in its CineClub subscription and Scene Plus loyalty programs, which saw the fee waived and dropped to $1, respectively.
The bureau alleged the fee constituted "drip pricing," a practice when customers are drawn into a purchase without full disclosure of the final cost.
The ruling doesn't mean that the online booking fee is going away. Cineplex clarified in its statement that the ruling doesn't affect the "continuation of offering this value-added service to consumers." The tribunal's concern was that the fee was hidden, as movie ticket prices displayed on the website and app did not factor in the booking fee up front.
"A deceptive marketing case can be a bit unsatisfactory because now they can [continue to] charge the same fee," Keldon Bester, executive director of the Canadian Anti-Monopoly Project, told CBC News. "They just need to be clear about it."
The $38.9-million fine Cineplex has now been handed is equivalent to the amount it collected from consumers through the $1.50 online booking fee between June 2022 and December 2023.
On top of the fine, the tribunal has ordered Cineplex not to engage in the same conduct that prompted the case for the next 10 years.
"It sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront," said Matthew Boswell, the commissioner of competition, in a statement Monday. "Businesses that fail to comply with the law risk significant financial penalties."
This is the first ruling for a case of its kind since amendments to the Competition Act in 2022 explicitly recognized drip pricing as a harmful business practice and gave the Competition Bureau more power to increase maximum fines.
François-Philippe Champagne, minister of innovation, science and industry, championed the decision as a "win for Canadians" on the social media platform X on Tuesday, saying this is "why we reformed the Competition Act."
Some theatregoers outside the Cineplex-owned Scotiabank Theatre in Toronto were happy to hear the outcome of the case.
Nathan Maharaj told CBC News that hidden fees are "sneaky" and that businesses should put the full price up front so "we can make our decision based on what we actually know the value will be."
