Cineplex Inc. has been ordered to pay a record $38.9 million fine after the Competition Tribunal found the theatre owner guilty of deceptive marketing practices.
The tribunal sided with the Competition Bureau in a case brought forward last May by the watchdog, in which Cineplex was accused of deceiving theatregoers by not immediately presenting them with the full price of a movie ticket when purchasing seats online.
The bureau said the deception lay in a $1.50 online booking fee Cineplex began charging in June 2022 to many customers not enrolled in its loyalty and subscription programs.
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 phenomenon is also known as “junk fees,” and the Competition Bureau noted that recent amendments to the Competition Act explicitly recognize drip pricing as a harmful business practice.
Cineplex denied the accusations, saying moviegoers are promptly told about fees they may face.
In a statement, the Competition Bureau said that the tribunal has ordered Cineplex not to engage in the conduct, or similar conduct, 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 the statement. “Businesses that fail to comply with the law risk significant financial penalties.”
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.
