After Cineplex Inc. was charged a record $38.9-million fine late Monday, experts have a message for other companies adding fees to just about everything sold online: watch out.
The experts say Canada is likely to see regulators eye other businesses after the theatre operator was admonished by the Competition Tribunal for drip pricing, a practice where customers are drawn into a purchase without full disclosure of the final cost.
“We see an airline price or a train price or a bus ticket or a concert ticket advertised as being a certain amount that lures us in and then all these other fees … are added on and it’s just kind of really deflating.” While some might think it’s “silly” for the bureau to pursue instances like the Cineplex case where people were charged such nominal fees, Bednar says it’s important to protect Canadians and signal to companies that the watchdog is “serious about enforcement.”
The ruling Monday marked the first case to be decided under the new version of the act, which upped the potential penalty for a first infraction from $10 million to three per cent of a company’s global revenue, said Kelly Harris, an advertising and marketing lawyer at Harris + Co. With fees so common in the course of business and digital avenues making it easier to calculate how much harm they create, Harris said, “I’m sure the business community is watching this with great interest, including the appeal.”
Any more that are pursued would come on top of a wave the legal system and regulators are already facing.
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