Cineplex slapped with record $38.9M fine over online booking fee – National

Cineplex Inc. has announced its intention to appeal a historic $38.9 million fine for deceptive marketing practices imposed by the Competition Tribunal.

The tribunal’s decision, issued late Monday, sided with the Competition Bureau in a case dating back to May 2023. The watchdog had accused Cineplex of misleading customers by not immediately disclosing the full price of a movie ticket when purchased online.

“The consumer is deceived or led astray by the contradictory and incomplete information on Cineplex’s ticket page, which obfuscates the existence and amount of the online booking fee,” the tribunal stated in a two-page document outlining its ruling.

The online booking fee in question is a $1.50 charge introduced by Cineplex in June 2022 for customers not enrolled in its CineClub subscription and Scene Plus loyalty programs. For those enrolled, the fee was either waived or reduced to $1.

The Competition Bureau alleged that the fee constituted “price dripping,” a practice where customers are enticed into a purchase without full disclosure of the final cost.

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Cineplex, however, strongly refuted the allegations, stating that customers are promptly informed about potential fees and have the option to avoid them entirely by purchasing tickets in person at a theater.

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Cineplex reiterated this stance following the tribunal’s ruling on Monday.

In a statement, the company expressed being “shocked” by the decision and emphasized that online booking fees are clearly and prominently displayed on its website and app.

“We believe our guests make informed purchase decisions and remain confident that our online booking fee is presented in a manner that fully complies with the law,” Cineplex stated.

The $38.9 million fine imposed on Cineplex is equivalent to the total 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 to refrain from engaging in similar practices that led to the case for a period of 10 years.

Although the Competition Bureau did not immediately respond to Cineplex’s decision to appeal the ruling, the bureau’s head referred to the tribunal’s decision as “a resounding win for Canadians.”

“It sends a strong message that businesses should not engage in drip pricing and must display their full prices upfront,” Competition commissioner Matthew Boswell stated.

“Businesses that violate the law face significant financial penalties.”

Boswell and the bureau’s case were supported by amendments to the Competition Act in June 2022, aimed at addressing drip pricing as a harmful business practice.

The tribunal anticipates providing a detailed explanation of its decision and order next week, following discussions with Boswell and Cineplex to identify and redact any confidential or competitively sensitive information.

© 2024 The Canadian Press