Cineplex Junxion Erin Mills is shown in the final stages of construction in Mississauga, Ont., on Monday, April 24, 2023. THE CANADIAN PRESS/Nathan Denette

OTTAWA - The Competition Bureau is suing Cineplex for allegedly advertising misleading ticket prices, the agency said Thursday.

The Bureau alleged in a press release that Cineplex is breaking the law by adding an additional fee that raises the price of its tickets purchased online.

It said an investigation found that consumers can't buy tickets online at advertised prices because there is a mandatory $1.50 fee for booking online.

The Bureau alleges this is an example of misleading drip pricing, also known as a junk fee.

The Bureau noted that amendments to the Competition Act enacted last June explicitly recognize drip pricing as a harmful business practice.

It said any additional fixed charges or fees are false or misleading under the law unless they are imposed by the government, such as sales tax.

Cineplex announced the online booking fee last June. It said Scene Plus rewards members would pay a reduced $1 per ticket purchased online, while members of CineClub, the company's monthly subscription program, would not pay any fee.

The company said at the time it was looking to "further invest and evolve our digital infrastructure," including website upgrades.

The Bureau alleged that Cineplex has generated significant revenues from the fee since its introduction. It said it has filed an application with the Competition Tribunal seeking for Cineplex to stop what it calls deceptive advertising, pay a penalty, and "issue restitution" to affected customers.

"Consumers expect to pay the advertised price. We’re taking action against Cineplex because misleading tactics like drip pricing only serve to deceive and harm consumers," Commissioner of Competition Matthew Boswell said in the press release.

"For years, we have urged businesses, including ticket vendors, to display the full price of their products upfront. I remind all businesses to review their pricing claims to make sure they do not mislead consumers."

Cineplex issued a statement in response, calling the legal action "meritless."

“We are disappointed by the statements made by the Competition Bureau today before the matter has been reviewed and decided upon by the Tribunal," it said. "Our online booking fee is not misleading and fully complies with the spirit and letter of the law."

The company says the fee is optional and "provides the convenience of advance seat selection."

"All of this information is clearly stated on our website," it said. "Unlike other ticketed venues where such fees may exist, Cineplex’s guests can buy their tickets at their local theatre without paying this modest fee."

-- With files from David Friend

This report by The Canadian Press was first published May 18, 2023.

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News from © The Canadian Press, 2023