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Canada’s Competition Bureau says it’s suing Cineplex Inc. for allegedly advertising misleading ticket prices online and drip pricing the total at checkout.
But the lawsuit is “meritless,” says the Canadian movie and entertainment company.
The Competition Bureau said in a news release Thursday that the cinema giant is breaking the law by advertising movie tickets at a lower price than “what many consumers actually have to pay” by adding an additional booking fee that raises the total price of tickets purchased on its website and mobile app.
“Consumers expect to pay the advertised price. We’re taking action against Cineplex because misleading tactics like drip pricing only serve to deceive and harm consumers,” said Matthew Boswell, commissioner of competition at the bureau.
In a statement Thursday evening, Cineplex said it is “disappointed by the (bureau’s) statements” before the case has been reviewed by the Competition Tribunal and said it expects the suit “to be dismissed quickly.”
“Our online booking fee is not misleading and fully complies with the spirit and letter of the law,” the company added.
In Cineplex’s fourth quarter earnings report for 2022, the company stated it introduced an online booking fee on June 15, 2022 “that applies to tickets purchased through Cineplex’s mobile app and website that will contribute to Cineplex’s further investment in its digital infrastructure.”
The Competition Bureau said its investigation found that consumers can’t buy tickets online at advertised prices because there is a mandatory $1.50 booking fee added to the total, which the bureau said is an example of misleading drip pricing, also known as a junk fee.
The Star confirmed that a regularly-priced general admission ticket of $14.50 on Cineplex’s website came to a total of $18.09, which included $2.09 in taxes and a $1.50 booking fee labelled as “non-refundable.”
Customers with a Scene+ membership, Cineplex’s rewards program, pay a booking fee of $1, up to $4, for each movie ticket. Only CineClub members, which is a $10 monthly membership (before taxes), get the booking fee waived.
In-person purchases at the box office, ticket kiosks or concession stands are not subject to the fee.
The Star reported in June 2022 that there was a processing fee attached to each purchase when Cineplex first introduced online sales. The company eventually eliminated the charge, hoping to encourage customers to buy advance online tickets to alleviate lineups at the box office.
“For years, we have urged businesses, including ticket vendors, to display the full price of their products upfront. I remind all businesses to review their pricing claims to make sure they do not mislead consumers,” Boswell added.
According to changes in the Competition Act that were introduced in April 2022 and came into effect June 2022, the amendments recognize drip pricing as a “harmful” business practice.
“We have been working with the Bureau, since late 2022, in an open and transparent manner,” Cineplex’s statement continued. “Our online booking fee is entirely optional and provides the convenience of advance seat selection. All of this information is clearly stated on our website.”
The bureau said additional fixed charges or fees are considered false or misleading under the law unless they are imposed by the government, such as sales tax.
According to the Notice of Application case documents filed with the Competition Tribunal, the bureau noted Cineplex’s quarterly and annual reports indicate that between June 23, 2022 and March 31, 2023, it generated revenue over $385 million in combined box office and online booking fees — of which $17 million is from booking fees.
The bureau's application also requests Cineplex to stop the advertising, pay a penalty and issue restitution to customers who purchased tickets through Cineplex’s website or app.
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