This week, Canada’s largest exhibitor Cineplex filed an appeal against a court ruling that it pay a fine of $38.9M CAN (or $29M US) after engaging in “deceptive marketing practices” related to charging online ticketing fees. Cineplex, which operates 169 theatres and 1,700 screens across Canada, disputed the charge made by Canada’s Competition Bureau, a federal agency analogous to the U.S. Federal Trade Commission. In a statement, the exhibitor that they were “shocked and disagree with the decision” and remained committed to offering “value-added service to customers.”
The justification for the fine was that Cineplex had failed to explain that a $1.50 ticketing fee would be added to the list price of a movie ticket purchased through the Cineplex website. Cineplex would present the cost of the ticket without the fee, and then add on the service charge after consumers had completed their purchase.
The Bureau cited this as an example of “drip pricing,” a practice in which consumers are drawn into a purchase without a clear statement of the final amount charged. In a statement shortly after their fine was levied, the Competition Bureau released a statement saying, “Consumers are entitled to clear information, and should never be surprised by hidden or additional fees.”
This ruling is the latest example of a crusade by regulators in Canada and the U.S. against companies adding on “junk fees” to purchases, with many analysts expecting it to be a sign of things to come. The U.S. Federal Trade Commission has been targeting businesses in other sectors for adding deceptive “junk fees” to purchases, in areas such as real estate and hotel and travel. Increased scrutiny of how exhibitors handle online movie ticket sales may be coming soon, with a trend to theatres giving their customers a clear notice of the fees involved.