June 27, 2019
On June 27, 2019, the Competition Bureau (Bureau) announced that Ticketmaster L.L.C., TNow Entertainment Group, Inc. and Ticketmaster Canada LP have agreed to pay a $4 million penalty and $500,000 of the Bureau’s costs relating to allegedly misleading online ticket sale pricing claims. See Ticketmaster to pay $4.5 million to settle misleading pricing case.
This is the conclusion of an ongoing case and Competition Tribunal proceedings in which the Bureau took the position that Ticketmaster was engaged in so-called misleading “drip pricing” (i.e., made upfront pricing claims that were not available based on additional mandatory fees charges at later stages of the purchasing process). “Drip pricing”, which is a metaphor for pricing that is disclosed gradually (and not upfront), has been one of the Bureau’s key misleading advertising enforcement priorities in several high-profile retail sectors, including in the car rental market.
This case has been settled under a consent agreement under which the three Ticketmaster entities have agreed, among other things, to comply with the civil deceptive marketing practices provisions of the Competition Act, stop making allegedly false upfront pricing claims, pay an administrative monetary penalty of $4 million and establish a competition law compliance program focused on the deceptive marketing provisions of the Act.
Under both the criminal and civil misleading advertising provisions of the Competition Act(sections 52 and 74.01), both literally false claims as well as misleading claims (e.g., the failure to adequately disclose material terms or conditions to consumers) can violate the Act. In this case, according to the Bureau, the price claims made by Ticketmaster “were misleading even though the amount of the fees was disclosed before consumers completed their transaction.”
It is important for both advertisers and their agencies and counsel to note that material terms relating to a product or service, including the price and any key limitations and conditions, should be clearly stated upfront in marketing (e.g., clearly disclosed in headline claims or, if not possible, in a disclaimer in close proximity to the primary claim). In addition, the “general impression” of a claim can be, and often is, relevant in assessing whether an advertising claim is materially false or misleading under the Competition Act.
As such, it is often insufficient to merely include material claims in longer terms and conditions that are not clearly disclosed or in subsequent contracts that are not brought to consumers’ attention upfront. It is particularly important to clearly and fully disclose the pricing of products or services upfront.
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