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TORONTO — Cineplex Inc. says it disagrees with a court decision upholding a $39-million penalty related to deceptive marketing.
The Federal Court of Appeal upheld a 2024 decision from the Competition Tribunal regarding Cineplex’s presentation of online booking fees, the Toronto-based company said Friday.
Cineplex said it will look to appeal to the Supreme Court of Canada.
The online booking fee was a $1.50 charge Cineplex began including in June 2022 for many customers not enrolled in its CineClub subscription and Scene Plus loyalty programs, which saw the fee waived and dropped to $1, respectively.
The Competition Bureau, which triggered the case in 2023, said the practice amounted to drip pricing, where a low price draws people in before they’re caught off guard later in the checkout process by fees that cause their total to climb.
The bureau had argued its decision should stand because Cineplex advertised ticket prices that were “unattainable” and did not make clear that making a purchase at a theatre would waive the fee.
The $38.9-million fine is equivalent to the amount it collected from consumers through the online booking fee between June 2022 and December 2023.
Cineplex has maintained it was upfront about the charges.
“We respectfully disagree with the Federal Court of Appeal’s decision. We continue to believe that our online booking fee has always been presented in a clear and prominent manner that fully complies with the spirit and letter of the law,” the company said in a news release.
The Competition Bureau said in a statement following the court decision that consumers deserve transparency when making purchases, and that the bureau’s work in such cases demonstrates its commitment to fighting misleading business practices.
“We welcome the Federal Court of Appeal’s decision, which represents another resounding victory for Canadians. This outcome reinforces the Bureau’s clear position that companies should not advertise prices that are unattainable,” Jeanne Pratt, acting competition commissioner, said in the statement which was issued Friday.
The case had an impact on Cineplex’s third-quarter earnings, reported in November of last year.
The company said its profit amounted to two cents per diluted share for the quarter compared with a loss of 39 cents per diluted share in the same quarter last year. The swing was largely because Cineplex had to put aside cash in the event it would have to pay the record fine imposed by the Competition Tribunal.
Drip pricing-related issues aren’t confined to industries where tickets are sold. As the bureau has discovered, it’s cropping up in all kinds of transactions.
