Cineplex has been fined nearly $39M for charging Canadians 'misleading' booking fees

Cineplex has been hit with a fine of almost $39 million after Canada's Competition Tribunal ruled on Monday that the company's online booking fees misled consumers.

The Tribunal found that Cineplex engaged in "drip pricing," a deceptive marketing practice where additional fees are added during checkout, making the final price higher than initially advertised.

The case, filed by the Competition Bureau, focused on Cineplex's $1.50 online booking fee, which applies to tickets purchased through its website and mobile app. The Tribunal ruled that these fees weren't clearly disclosed at the start of the purchase process, violating the deceptive marketing provisions on drip pricing in the Competition Act.

According to the Bureau, drip pricing occurs when the price consumers initially see is not the final price because additional, obligatory fees are added during checkout. This does not include any fees imposed by the government, such as sales tax.

The Tribunal found that Cineplex's online booking fees, added only after customers had already selected their tickets, made the advertised price unattainable, ruling in favour of the Competition Bureau and ordering Cineplex to pay a record $38.9 million penalty — an amount equal to what it collected from these fees between June 2022 and December 2023 — plus legal costs.

Competition Commissioner Matthew Boswell called the ruling "a resounding win for Canadians," adding that it "sends a strong message" to other businesses that misleading practices like drip pricing won't be tolerated.

As of the time of publication, Cineplex continues to charge a $1.50 booking fee per ticket for purchases from its website and mobile app, with discounts for members of its loyalty programs. Cineplex says on its website that this fee "allows for advanced seat reservations and sharable digital tickets." The fee is non-refundable and capped at four tickets per transaction.

Cineplex announced shortly after the ruling on Monday that it will appeal the decision.

"We are shocked and disagree with the decision and will appeal to the Federal Court of Appeal," the company said in a press release. "The online booking fee is an optional, value-added service. It provides moviegoers with the confidence of knowing they have a ticket and an exact seat location before they arrive at a theatre. The fee is presented on our website and app in a clear and prominent manner."

"To clarify, this ruling has no impact on the continuation of offering this value-added service to consumers," it said, adding that it remains "confident our online booking fee is presented in a way that fully complies with the spirit and letter of the law."