The Competition Tribunal heard a second day of arguments on Feb. 29 in a case that could decide whether Cineplex can keep charging customers an extra fee for buying movie tickets online.
It’s the first time the tribunal is hearing a case involving “drip pricing” since the Competition Act explicitly recognized it as a harmful business practice in June 2022.
Drip pricing, also known as a junk fee, is a deceptive practice in which customers are drawn into a purchase without full disclosure of the final cost.
The $1.50 fee charged by Cineplex for online purchases meets that category, according to the competition commissioner, who brought the deceptive marketing case to the Competition Tribunal.
Lawyers for the commissioner argued on Feb. 28 that customers have no choice but to pay the fee, and buying tickets in person at the movie theatre isn’t a reasonable alternative.
Cineplex has made almost $40 million from the fees since it implemented them in mid-2022.
The tribunal heard debates over whether the fee was visible enough on the movie giant’s website and if it’s reasonable to expect moviegoers will scroll down to see the total price.
The competition commissioner says the fees are deceptive because moviegoers don’t see the full price of a movie ticket on the very first page when buying tickets.
The fees are instead disclosed “below the fold” or off the screen for the vast majority of moviegoers.
Cineplex said in written arguments submitted to the tribunal that people can completely avoid the online booking fee if they want, and half of all customers choose to buy at the theatre.
It also argued the full price of the ticket, including the online booking fee, is displayed “prominently” and immediately left of the “proceed” button customers must click to buy their tickets.
On Feb. 29, Cineplex lawyer Robert Russell said that the commissioner’s argument is that “everything is about when you see it, not do you see it.”
“There’s no misrepresentation. There’s no omission,” he said. “The scrolling issue, the so-called shrouding issues, it’s all about when you see it.”
The competition commissioner has cited an expert opinion that Cineplex’s pricing practices meet the definition of a shrouded attribute—when companies obfuscate or make it difficult to find product information from customers.
Mr. Russell told the court on Feb. 29 the case could set a significant precedent for businesses that charge one price for online services and another in person.
The case will also be important for determining whether businesses have to fit all relevant information on a screen so a customer can see it without scrolling, Mr. Russell argued.
“It’s not a small issue,” he said. “That’s an immense implication for a precedent from this tribunal in terms of online commerce.”
The tribunal wrapped up the hearings on Feb. 29 without delivering a ruling.
