Cineplex Plans to Challenge $39 Million Penalty for Online Booking Fees

September 27, 2024 TruthUSA

Media and entertainment company Cineplex is planning to appeal a recent decision by the Competition Tribunal that imposed a $38.9 million penalty for charging $1.50 online booking fees for tickets.

The decision, released on Sept. 23, found Cineplex guilty of engaging in drip pricing. This practice entices consumers with low prices but adds fees later, resulting in customers paying more than the advertised price.

Cineplex expressed its disagreement with the Tribunal’s decision, calling it “shocking.” A company news release on Sept. 23 stated their intention to appeal to the Federal Court of Appeal.

According to Cineplex’s release, the online booking fee is an optional value-added service that gives moviegoers the assurance of having a ticket and a specific seat location before arriving at the theater. They claim that the fee is transparently displayed on their website and app.

However, the Tribunal deemed Cineplex’s online price representations as “false” or “misleading.”

The Tribunal’s Information Note on Sept. 23 stated that consumers buying tickets online are obligated to pay a fixed online booking fee, on top of the ticket prices advertised by Cineplex. This fee does not apply to tickets purchased in person at a Cineplex theater.

The Tribunal noted that customers were “deceived” by the information on Cineplex’s tickets page that obscured the online booking fee.

The Competition Bureau commissioner, Matthew Boswell, hailed the Tribunal’s decision as a victory for Canadians. He emphasized the importance of businesses being transparent with their pricing upfront and avoiding drip pricing practices to maintain fair competition.

The Competition Bureau labeled the online fee as deceptive to consumers. They stated that consumers deserve clear information and should not be surprised by hidden fees. Businesses engaging in deceptive practices harm competition and compliant businesses.

The penalty imposed on Cineplex equals the total amount collected from customers through the online booking fee from June 2022 to December 2023.

While the full rationale for the decision remains confidential as sensitive information is redacted, Cineplex intends to continue charging the online fee despite the ruling.

In response, Cineplex defended its service, asserting that the fee is displayed in accordance with the law and helps consumers make informed purchasing decisions.

The Competition Bureau initiated the proceedings on May 18, 2023, following an investigation into the online booking fee. This case marks the first application of the amended Competition Act sections related to drip pricing by the Tribunal.

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