January 28, 2026
On January 21, 2026, Canada’s Federal Court of Appeal (FCA) dismissed an appeal by Cineplex Inc. (Cineplex) of a 2024 Competition Tribunal (Tribunal) decision that held that Cineplex had engaged in drip pricing contrary to sections 74.01(1)(a) and 74.01(1.1) of Canada’s federal Competition Act (the general civil misleading advertising and civil drip pricing provisions of the Act) (Cineplex Inc. v. Commissioner of Competition, 2026 FCA 10 (CanLII)).
The Tribunal had ordered Cineplex to pay a penalty of $38.9 million for failing to adequately disclose a mandatory $1.50 online booking fee before consumers purchased theatre tickets online (for a discussion of the Tribunal’s decision, see below and link to our earlier blog post).
COMPETITION TRIBUNAL DECISION
On September 23, 2024, Canada’s Competition Bureau announced that the Tribunal found that Cineplex, a Canadian theatre chain, had engaged in drip pricing by adding a mandatory and insufficiently disclosed $1.50 online booking fee for the online sale of movie tickets (see: Competition Bureau wins deceptive marketing case against Cineplex).
In making its announcement, the Competition Bureau said:
“The Tribunal’s decision in the Cineplex case is a resounding win for Canadians. It sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront. Businesses that fail to comply with the law risk significant financial penalties.”
Then on October 4, 2024, the Tribunal released its full unredacted decision in this drip pricing case (see: Canada (Commissioner of Competition) v. Cineplex Inc., 2024 Comp Trib 5).
In general, while the Tribunal was cautious not to make broad holdings as to how Canada’s new standalone civil drip pricing provision under the Competition Act may apply in all cases, given the wide variety of price related claims that are possible, it held that Cineplex violated both the standalone civil drip pricing provision (section 74.01(1.1)) and also the general civil misleading advertising provision (section 74.01(1)(a)) of the Act.
The Tribunal ordered Cineplex to pay an administrative monetary penalty of more than $38.9 million and legal costs. This penalty is equivalent to the amount that Cineplex collected from theatre consumers from the time of the introduction of its online booking fee from June 2022 until December 2023.
For our blog post on the Competition Tribunal’s decision and key points from the decision, see: Canadian Competition Tribunal Releases Full Decision in $38.9 Million Cineplex Drip Pricing Case.
CINEPLEX APPEAL
In its appeal of the Tribunal’s decision, Cineplex argued that the Tribunal: (i) had erred in its assessment of the general impression conveyed by and the literal meaning of the representations made by Cineplex; (ii) had erred in concluding that Cineplex’s representations were false and misleading and in its interpretation of the drip pricing sections of the Competition Act; and (iii) that it had imposed a penalty that that was inconsistent with the text and purpose of the Competition Act and that was punitive, disproportionate and unprecedented.
FEDERAL COURT OF APPEAL DECISION
On January 21, 2026, the FCA, with reasons delivered per Mactavish J.A., dismissed Cineplex’s appeal and upheld the Tribunal’s 2024 drip pricing decision finding Cineplex liable for drip pricing under sections 74.01(1)(a) and 74.01(1.1) of the Competition Act (the general civil misleading advertising and civil drip pricing provisions of the Act).
Some of the key points from the FCA’s decision include the following:
Outcome of the case: The FCA dismissed Cineplex’s appeal with costs.
General civil misleading advertising provision (section 74.01(1)(a)): The FCA concluded that the Tribunal did not err in finding that Cineplex had violated section 74.01(1)(a) of the Competition Act by making a representation to the public that is false or misleading in a material respect. The FCA held that the Tribunal’s factual findings provided a “clear and logical basis” in this case for its conclusion that for the purposes of the general impression analysis of the claims, the four corners of the representation should be confined to the pricing representations on Cineplex’s tickets page (i.e., above the electronic “fold” on the page and without the need for scrolling down the page). The FCA also upheld the Tribunal’s holding that earlier jurisprudence dealing with print media (and the importance of the entire representation) was not applicable in modern dynamic digital environments. For more information about the general civil and criminal misleading advertising provisions of the Competition Act, see: Misleading Advertising.
Standalone civil drip pricing provision (section 74.01(1.1)): The FCA held that there was no palpable or overriding error in the Tribunal’s analysis with respect to its standalone drip pricing provision finding. More specifically, the FCA held that the Tribunal had not erred in finding that the ticket prices represented on Cineplex’s website were “unattainable”, that Cineplex’s booking fee is a “fixed” charge or fee or that the booking fee was “obligatory” for the purposes of section 74.01(1.1) of the Competition Act. For more information about the standalone drip pricing provisions of the Competition Act, see: Drip Pricing.
Penalty: The FCA upheld the Tribunal’s decision to impose a $38.9 million penalty against Cineplex. In this regard, the FCA held that the Tribunal did not misdirect itself to the applicable law (and no overriding error on the part of the Tribunal was alleged by Cineplex). The FCA also held that it was not its role in an appeal to substitute its own exercise of discretion for that of the Tribunal with respect to the applicable penalty.
Appeal: Cineplex has expressed disagreement with the FCA’s ruling and indicated that it intended to seek leave to appeal to the Supreme Court of Canada.
IMPLICATIONS
The FCA’s decision in the Cineplex case is a major victory for the Competition Bureau in its efforts to enforce transparency in pricing for consumers, particularly in relation to targeting the failure to adequately disclose mandatory, non-governmental fees.
In general, this decision is a reminder to marketers of the risks of failing to provide complete upfront pricing for products and services.
The decision, which distinguished former misleading advertising case law relating to traditional media from “modern dynamic environments”, now imposes a stricter standard for adequately disclosing upfront some types of additional prices in online marketing (based on this case, specifically additional mandatory, non-governmental fees).
It remains to be seen whether Canadian courts will also hold advertisers to a stricter standard for online disclosure of other types of material terms for other types of offers and promotions. It also remains to be seen whether the Supreme Court of Canada will grant leave to hear Cineplex’s appeal from the FCA’s decision and, if leave is granted, whether it will uphold the FCA’s decision.
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