Cineplex ordered to pay $38.9 million over ‘deceptive’ online booking fees

Cineplex has been ordered to pay a record $38.9 million after Canada’s Competition Tribunal ruled that the national theatre chain’s online booking fees are misleading.

In a news release, the Competition Tribunal sided with the Competition Bureau in finding Cineplex guilty of drip pricing, a deceptive business practice where the initial price of a product or service is increased through additional fees later in the purchasing process. In particular, the Tribunal says the $1.50 booking fee that Cineplex charges per ticket on purchases made through its website and mobile app constitutes drip pricing since it’s not made clear upfront.

Therefore, the company is now required to pay $38.9 million, which is the sum that it earned from the booking fees between June 2022 and December 2023. Cineplex quietly introduced the fee in June 2022 ahead of summer blockbusters like Thor: Love and Thunder without any significant notification about the price change. The Competition Bureau then sued Cineplex over the fees in May 2023.

As part of its September 23rd ruling, the Competition Tribunal has also ordered Cineplex to not engage in the drip feeding or similar conduct for a period of 10 years. Therefore, it remains to be seen how Cineplex will update its website and app to better communicate the online booking fee.

During its legal battles with the Competition Bureau, Cineplex had argued that the fee is displayed “prominently,” although a quick test on the theatre chain’s site reveals that you aren’t explicitly informed of the $1.50 fee until later in the checkout process. For comparison, Landmark Cinemas, Canada’s second-largest theatre chain, also charges this $1.50 fee but explicitly includes it right beside the price of a ticket before you select it. There’s also additional context for the fee immediately below.

Cineplex has also defended the fee by arguing that it’s avoidable if you go purchase tickets in theatres or get it waived through a $9.99/month CineClub subscription. (Members of the free Scene+ have the fee reduced to $1.)

Of course, waiting to buy tickets in the theatre often isn’t ideal, especially if you’re buying for a popular movie that will likely sell out and/or trying to guarantee seating with a group. Likewise, telling people to subscribe to a membership, especially if they’re more casual movie goers, isn’t exactly reasonable.

But what’s more amusing at all is Cineplex’s latest defence of the online booking fee. In a press release outlining its intention to appeal the Competition Tribunal’s ruling, Cineplex had the gall to say it’s actually gouging and misleading customers to add “value” to the theatre-going experience:

“Enhancing our guest experience is at the forefront of what we do and our commitment to Canadian consumers has always been about choice. 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.

We are shocked and disagree with the decision and will appeal to the Federal Court of Appeal including the $39 million administrative monetary penalty. To clarify, this ruling has no impact on the continuation of offering this value-added service to consumers. We believe our guests make informed purchase decisions and remain confident our online booking fee is presented in a way that fully complies with the spirit and letter of the law.”

It’s unclear how, exactly, paying more to simply buy a ticket online in any way constitutes adding “value” to customers. It also remains to be seen what will come out of this appeal, but it certainly doesn’t seem like Cineplex has much of a defence.

The Competition Bureau calls on Canadians to report any businesses they suspect are engaging in drip pricing or other misleading business practices by completing an online form.

Image credit: Shutterstock

Source: Competition Bureau