Cineplex has lost its appeal and will be forced to pay nearly $39 million after Canada’s Federal Court of Appeal upheld a Competition Tribunal ruling that found the company misled consumers by charging a $1.50 online booking fee.Blacklock's Reporter says the country’s largest movie theatre chain was ordered to pay $38,987,000 plus costs for breaching the Competition Act. The penalty represents roughly two years of revenue generated by the controversial booking fee.In dismissing Cineplex’s appeal, Justice Ann Mactavish said the law exists to protect consumers and ensure fair competition across the Canadian economy.“The purpose of the Competition Act is to promote vigorous and fair competition in Canada and to discourage certain types of commercial behaviour that are viewed as detrimental to Canada and the Canadian economy,” she wrote.Cineplex had previously described the penalty as excessive. .In a 2024 statement, the company said it was “shocked” by the ruling and strongly disagreed with the tribunal’s findings.The theatre chain argued the $1.50 fee was clearly disclosed, optional, and easily avoided by purchasing tickets in person rather than online. It also maintained the charge provided value by allowing customers to reserve seats in advance.“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,” Cineplex said.According to the company, the fee was a “value-added service” that gave moviegoers certainty about ticket availability and seat location before arriving at the theatre, and was displayed prominently on its website and app.The Competition Bureau disagreed, successfully arguing the fee amounted to false or misleading representations about ticket prices, a violation of federal law..“The Competition Tribunal found that Cineplex had misled consumers with respect to the price of movie tickets by adding a fixed obligatory fee to tickets sold online,” Justice Mactavish wrote, concluding there was no basis to overturn that finding.Federal lawyers characterized the practice as a form of “drip pricing,” which is prohibited under the Competition Act. Drip pricing occurs when a low price is advertised to attract consumers, only for mandatory fees to be added later, making the advertised price unattainable.The Bureau has pursued similar cases in the past. In 2016, Avis and Budget Rent-A-Car paid $3.25 million in fines and costs after charging additional mandatory fees such as “car taxes” and “environmental fees” that added up to 27% to advertised rental prices.Enterprise Rent-A-Car reached a $1 million settlement with the Bureau in 2018. At the time, then-competition commissioner John Pecman said the action would help ensure “consumers will now be able to trust that the prices they see advertised are the ones they will pay.”
