Cineplex to Fight $39M Penalty Over Online Booking Fees

Cineplex Odeon Theater at Dundas Square in Toronto on Dec.16, 2019. The Canadian Press/Aaron Vincent Elkaim

Media and entertainment company Cineplex said it will appeal a recent Competition Tribunal decision that slapped it with a $38.9 million penalty for charging $1.50 online booking fees for tickets.

The decision, released on Sept. 23, found Cineplex had engaged in drip pricing, which involves a business offering low prices to attract consumers but adding fees so the customer pays more than the advertised price.

Cineplex said it was “shocked” and disagreed with the Tribunal’s decision. A Sept. 23 company news release said it would appeal to the Federal Court of Appeal.

“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 release said. “The fee is presented on our website and app in a clear and prominent manner.”

However, the Tribunal said the online prices representations were “false” or “misleading.”

“Consumers who buy tickets in those channels must pay a fixed obligatory fee – the Online Booking Fee – on top of the prices Cineplex represents for movie tickets,” the Tribunal said in a Sept. 23 Information Note. "As its name suggests, the Online Booking Fee does not apply to tickets purchased in-person at a Cineplex theatre.”

The note said customers were “deceived” or “led astray” by the information on Cineplex’s tickets page that “obfuscates” the online booking fee.

“The Tribunal’s decision in the Cineplex case is a resounding win for Canadians,” Competition Bureau commissioner Matthew Boswell said in the release.

“It sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront. Businesses that fail to comply with the law risk significant financial penalties.”

The Competition Bureau said the fee was deceptive to consumers.

“Consumers are entitled to clear information, and should never be surprised by hidden or additional fees. When businesses engage in false or misleading practices, it harms competition and businesses who comply with the law,” the bureau said in a Sept. 23 news release.

It said the penalty is equivalent to the money Cineplex collected from customers from the time the online booking fee was introduced in June 2022 until December 2023.

The tribunal said the full reasons for its decision are confidential while it works with the commissioner and Cineplex to redact sensitive information.

Cineplex said it will continue to charge the online fee despite the decision.

“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.”

The Competition Bureau filed its application with the Tribunal on May 18, 2023, following an investigation into the online booking fee.

It’s the first time the Tribunal has applied recently changed sections of the Competition Act that deal with drip pricing, it said.