Cineplex Inc. CGX-T is engaging in harmful “drip pricing” with its online booking fees, and moviegoers have no way to avoid them, says Canada’s competition czar.
A lawyer representing the competition commissioner made that argument Wednesday at a Competition Tribunal hearing of the case against the movie giant.
Cineplex argued customers can buy tickets in person at the movie theatre, but the commissioner is arguing that’s not a real alternative because they are two separate services.
“Does the fact that the customer can abandon the purchase, trundle down to the theatre and purchase a ticket mean the fee is not obligatory? The answer to that is no,” said lawyer Jonathan Hood.
He argued customers have no choice but to pay the fee to complete the purchase.
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.
Cineplex charges an extra $1.50 fee to the price of every ticket purchased online, though some customers belonging to loyalty plans see that fee lowered or waived.
The company has made almost $40-million from the online booking fees since it implemented them in June 2022.
That same month, the Competition Act explicitly recognized drip pricing as a harmful business practice.
The Competition Bureau says additional fixed charges or fees are false or misleading under the law unless they are something imposed by the government, such as sales tax.
Cineplex has said the case is meritless.
It says the fee is not misleading, information around the fee is clearly stated on its website and the fee is optional.
The competition commissioner says the fees are deceptive because moviegoers are not presented with the full price of a movie ticket on the very first page they see when buying tickets.
The fees are instead disclosed “below the fold” or off the screen for the vast majority of moviegoers, thus misleading people about the final price they will pay.
“The consumers are credulous. They are ready to believe the initial ticket price representations they can see on the screen,” Hood said.
“The consumer is inexperienced at detecting the falsehoods or subtleties found in commercial representations.”
Hood argued consumers are “not going to particularly pay attention to the subtotal to see if it’s consistent with the ticket prices.”
He said customers are also not going to scroll down the website, “because Cineplex gives them no reason to scroll.”