Canada’s competition laws have been criticized in the past for having fewer teeth than a hockey player who took a slapshot to the mouth. It looks like the tide could be changing.
What happened: Canada’s Competition Tribunal hit Cineplex with a record-setting $38.9 million fine for charging customers who were not part of its loyalty program an extra $1.50 online booking fee it introduced in June 2022.
- Cineplex has vowed to appeal the fine, saying in a statement that its “online booking fee is presented in a way that fully complies with the spirit and letter of the law.”
Catch-up: The Cineplex case is the first ruling by the Competition Tribunal decided under Competition Act amendments explicitly recognizing drip pricing — adding on fees that were not advertised as part of the initial asking price of the transaction.
Why it matters: Drip pricing has crept into countless retail and service segments. With this massive fine, Canada’s competition watchdog is baring its teeth and might actually scare off companies from using the practice.
What’s next: Future fines have the potential to blow past Cineplex’s record. The maximum fine for an initial civil violation of drip pricing laws is three times the value of the benefit reaped from drip pricing or, if that cannot be ascertained, 3% of gross revenues.—QH