February 14, 2020
The Competition Bureau’s (Bureau) top priority for enforcement and advocacy is currently the digital economy (see, for example, here, here, here, here and here). And for online marketing practices, false or misleading prices, including drip-pricing (i.e., where additional fees for an online purchase are only disclosed later or at the end of the check-out process), is top of its list.
In this respect, on February 13, 2020, the Bureau announced that online ticket seller StubHub Inc. has agreed to pay a $1.3 million administrative monetary penalty (AMP) for allegedly failing to adequately disclose the full price of tickets for entertainment and sporting events (see: StubHub to pay $1.3 million penalty for advertising unattainable prices for event tickets).
This case follows a 2017 statement by the Bureau warning sporting and entertainment vendors to ensure that their upfront pricing was accurate (see here).
In making the announcement, the Bureau said:
“A Bureau investigation determined that StubHub advertised tickets at unattainable prices on its websites, mobile apps and in promotional e-mails to Canadians. The Bureau found that consumers could not buy tickets at advertised prices because StubHub charged consumers mandatory fees in addition to the prices advertised.”
According to the Bureau, the full prices were only disclosed at later stages in the purchasing process (and that some consumers who requested inclusive pricing, using a “show prices with estimated fees” toggle, were also charged higher prices than disclosed).
Pursuant to a 10-year negotiated consent agreement, StubHub has agreed to stop making false or misleading price claims, pay an AMP of $1.3 million and adopt a competition law compliance program.
Under both the civil and criminal false or misleading representation provisions of the Competition Act (sections 52 and 74.01), a pricing or other claim can violate the Act where it is either literally false or misleading (e.g., additional material information necessary for a consumer to make a purchasing decision) is not adequately disclosed.
Over the past several years, drip-pricing has been a key focus for the Bureau in its enforcement on false or misleading online claims. In this respect, the Bureau has commenced enforcement against four major car rental companies (Avis/Budget, Hertz, Enterprise and Discount), as well as Ticketmaster for allegedly making false or misleading online price claims (see, for example, here and here).
With false or misleading pricing claims remaining a top Bureau enforcement priority, including drip pricing and ordinary selling price claims, it is incumbent on brands and their advisors to ensure that online price claims (as well as those made in other media, including mobile and e-mail) are accurate and that any additional fees are clearly disclosed.
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