On July 4, 2017, the Competition Bureau (Bureau) issued a statement warning sporting and entertainment vendors to ensure that their upfront pricing was accurate.
In particular, the Bureau cautioned ticket sellers that engaging in “drip pricing” (i.e., only disclosing a portion of the price upfront with additional mandatory fees, taxes or charges added later in the checkout process) can violate the misleading advertising provisions of the Competition Act.
The failure to accurately disclose the price of a product or service upfront can potentially violate the Competition Act as either a literally false claim (e.g., the upfront price is false) or as a misleading claim (i.e., the failure to disclose additional important terms or conditions, such as additional fees).
Upfront pricing disclosure is one of the Bureau’s top advertising enforcement related priorities and the Bureau has commenced several major drip pricing related cases over the past several years (e.g., cases against Avis and Budget for allegedly violating the Competition Act by failing to adequately disclose the full prices for car rentals). See Avis and Budget to ensure prices advertised are accurate.
Brands and agencies should also note that even if the terms and conditions for a purchase are legally enforceable from a contract law perspective, they can nevertheless raise Competition Act misleading advertising issues where there is inadequate disclosure of important terms, such as the failure to clearly state the price of a product upfront.
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