Cineplex appeals Competition Tribunal decision on ‘drip pricing’

Cineplex Inc. has launched an appeal of a record $38.9-million fine for deceptive marketing practices imposed by the Competition Tribunal.

The country’s largest cinema owner filed notice with the Federal Court of Appeal on Wednesday, vehemently denying it engaged in “drip pricing” and asking for a stay of the fine pending completion of the case.

Cineplex said it has been granted an interim stay until the motion is heard by the judicial panel.

The fine came down as part of a decision the tribunal issued in September that found the company used drip pricing and misled customers on its website, breaching the Competition Act.

The Competition Bureau first opened the case in May 2023. The watchdog accused the company of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online.

Cineplex again rejected that view this week.

In its filing, the company said the tribunal erred in finding its website and mobile app “false and misleading,” given that the total ticket price — excluding taxes — was “prominently displayed to the consumer on the first page of the ticketing process upon selecting the number of tickets.”

In a release, Cineplex said the fee reflects an optional, value-added service.

“It provides moviegoers with the convenience of online booking — knowing they have a ticket for a specific show time and an exact seat location before they arrive at a theatre,” said spokeswoman Michelle Saba in a release.

The company also argued in its appeal that the nearly $40-million penalty was “out of all proportion.”

Cineplex began charging a $1.50 online booking fee in June 2022 to many customers not enrolled in its CineClub subscription and Scene Plus loyalty programs, who saw the fee waived and dropped to $1, respectively.

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

“The consumer is deceived or led astray by the contradictory and incomplete information on Cineplex’s tickets page, which obfuscates the existence and quantum of the online booking fee,” the tribunal said in a two-page information outlining its decision last month. 

This report by The Canadian Press was first published Oct. 24, 2024.