Cineplex Inc. says it will appeal a record $38.9 million fine for misleading marketing practices imposed by the Competition Tribunal.
The fine was included in a decision the court issued on Monday evening, in which it sided with the Competition Bureau in a case dating back to May 2023. That was when the watchdog accused Cineplex of misleading moviegoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online.
“The consumer is misled or led astray by the contradictory and incomplete information on Cineplex’s ticket page, which obscures the existence and amount of the online reservation fee,” the court said in a two-page brief outlining its decision.
The online reservation fee you’re referring to is a $1.50 charge that Cineplex began pricing in June 2022 for many customers who were not enrolled in its CineClub subscription and Scene Plus loyalty programs, which saw the fee eliminated and reduced to $1, respectively.
The office alleged that the fee constituted “price gouging,” a practice in which customers are lured into a purchase without being told the full final cost.
However, Cineplex vehemently denied the allegations, saying moviegoers are quickly informed of the charges they may face and can avoid them altogether by purchasing seats in person at a theater.
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Cineplex maintained that view on Monday after the court’s ruling was announced.
The company said in a statement that it was “shocked” by the decision and noted that online booking rates are presented on its website and app “in a clear and prominent manner.”
“We believe our guests make informed purchasing decisions and trust that our online booking fee is presented in a manner that fully complies with the spirit and letter of the law,” Cineplex said.
The $38.9 million fine Cineplex received is equivalent to the amount it charged consumers through the $1.50 online reservation fee between June 2022 and December 2023.
In addition to the fine, the court ordered Cineplex not to engage in the same conduct that prompted the case for a period of 10 years.
While the Competition Bureau did not immediately respond to a request for comment on Cineplex’s announcement that it would appeal the ruling, the bureau’s head earlier Monday night called the court’s decision “a resounding victory for Canadians.”
“This sends a strong message: companies should not apply drip pricing and must display their full prices up front,” Competition Commissioner Matthew Boswell said in a statement.
“Companies that fail to comply with the law risk significant financial penalties.”
Boswell and the bureau’s case was helped by June 2022 amendments to the Competition Act designed to recognise drip pricing as a harmful business practice.
The court says it expects to detail the full reasons behind its decision and order next week, once the organization has worked with Boswell and Cineplex to identify “confidential or competitively sensitive information” that must be redacted.
© 2024 The Canadian Press
