Canadian court dismisses Cineplex appeal in $39M "drip pricing" ruling
Cineplex is still on the hook for a $39-million fine in a “deceptive marketing” ruling from Canada’s Competition Tribunal.
On Friday, Jan. 23, the Federal Court of Appeal dismissed the movie theatre company’s appeal and upheld the Tribunal’s September 2024 decision regarding the presentation of an online booking fee that was introduced in 2022.
The Tribunal ruled in favour of the Competition Bureau, an independent law enforcement agency that regulates competition in Canada, in the “deceptive marketing” case against Cineplex. The agency accused the company of engaging in “drip pricing” when it added the mandatory online booking fee of $1.50.
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Drip pricing is a strategy where businesses advertise low prices only to include mandatory fees later, making the final cost higher than initially presented. This deceptive practice goes against the Competition Act, which recognizes drip pricing as “a harmful business practice.”
“We welcome the Federal Court of Appeal’s decision — another resounding win for Canadians,” said Acting Commissioner of Competition Jeanne Pratt in a statement on Friday. “This outcome reinforces the Bureau’s clear stance that businesses should not advertise prices that are not attainable.”
With this dismissal, Cineplex still faces a penalty of $39 million, equivalent to the amount collected from consumers after introducing the fee from June 2022 to December 2023. The company has also been ordered to pay for legal fees.
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“Canadians deserve transparency when making purchases. Businesses that fail to comply with the law risk significant financial penalties,” added Pratt.
In response on Friday, Cineplex said it disagrees with the court’s decision.
“We continue to believe that our online booking fee has always been presented in a clear and prominent manner that fully complies with the spirit and letter of the law,” stated the company.
It now plans to challenge this decision before the Supreme Court of Canada.
In 2024, two class-action lawsuits were launched against Cineplex, claiming it failed to disclose the booking fee it charges on online ticket purchases at the outset of the ticket-buying process.