The Competition Tribunal has ordered Cineplex to pay a $38.9 million penalty after ruling in favour of the Competition Bureau on its accusation of drip pricing.

The lawsuit stems from Cineplex’s mandatory online booking fee of up to $1.50, in place from June 2022 until December 2023, that affected many consumers booking online not enrolled in their loyalty or subscription programs.

The Bureau alleged the fee was not sufficiently disclosed to consumers and therefore online booking costs did not match Cineplex’s advertised prices, leading to a deceptive marketing tactic known as drip pricing. The tactic was explicitly recognized by the Competition Act as a harmful business practice in June 2022.

Cineplex said in a statement that it will file to appeal the decision and the penalty fee to the Federal Court of Appeal. “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,” read the statement.

In its own statement, the Competition Bureau said that the penalty is equivalent to what Cineplex collected from consumers through the fee while it was active.

“The Tribunal’s decision in the Cineplex case is a resounding win for Canadians,” said commissioner of competition Matthew Boswell. “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 Tribunal’s ruling also ordered Cineplex not to engage in the same conduct or similar conduct for a period of 10 years.

Image courtesy of Cineplex