Canada’s Competition Bureau is pushing ticket vendors to be upfront with Canadian consumers about the true cost of tickets online.
According to a statement by the bureau, the practice known as “drip-pricing” sees vendors advertising one price and piling on additional fees, taxes and other charges until the final payment is between 10 and 57 per cent higher than the original price,” said Josephine Palumbo, the Deputy Commissioner of Competition with the Bureau.
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“You’re misleading consumers because the advertised price is unattainable. You start off with a really attractive online price, but when you add the additional fees and taxes and charges, consumers are actually paying a lot more for something than what they thought they were,” she said.
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The unexpected fees are often added in the last steps of a purchase, when buyers have already picked out their seats and are ready to pay. According to the Bureau, this not only misleads the consumer, but it affects the functioning of the marketplace.
“Canadians spend billions of dollars online each year buying tickets to their favourite sporting and entertainment events. To promote continued innovation and growth in the digital economy, it’s critical that consumers have confidence that the prices they see online are the ones they will pay,” said John Pecman, the Commissioner of Competition, in a statement.
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Over the past year, the Competition Bureau has taken action against two car rental companies found guilty of “drip-pricing.” Hertz, Dollar Thrifty, Aviscar Inc. and Budget were ordered to pay penalties in the millions of dollars for advertising “unattainable” prices.
In the cases of Hertz and Dollar Thrifty, the Bureau determined that the companies charged the additional fees to cover their costs of doing business, and ordered them to pay a $1.25-million penalty as a result. In the 2016 cases of Aviscar Inc. and Budget, the penalty for falsely advertising prices was $3 million.
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Palumbo said that as Canadians rely more and more on the Internet to make their purchasing decisions, it’s important to raise the bar on online advertising standards.
For the most part, the Bureau has handled companies who engage in deceptive marketing on a case-by-case basis. Many companies that advertise one price to consumers and then introduce additional fees later in the purchasing process may be guilty under this section, she explained.
The Competition Act prohibits deceptive marketing practices under section 74.
“The Competition Act basically prohibits the making of false or misleading representation,” Palumbo said. She encourages consumers to make a complaint on the Competition Bureau website if they experience “drip-pricing,” as complaints from Canadians largely contribute to which issues the Bureau decides to deeply pursue.
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Out of the 14,000 complaints received by the Bureau every year, Palumbo added, approximately 70 per cent of them are about deceptive marketing tactics.
In addition, Advertising Standards Canada, a self-regulatory non-profit for the Canadian advertising industry, released a report in March claiming that almost 60 per cent of the complaints it receives allege inaccurate or misleading advertising.
“What we’re trying to do is we’re striving to promote growth in the digital economy. And to do that, we’re trying to make sure that there’s integrity in the digital economy. We know that consumers increasingly rely on the Internet to make their purchasing decisions and we want to make sure Canadians have truthful information at their disposal when making those purchasing decisions,” Palumbo said.
This isn’t the first time ticket sales have been called into question in Canada. In recent months, Ontario banned the operation of scalper bots and introduced a cap on resold tickets. Palumbo said the Bureau “won’t hesitate to take action” against specific companies who engage in “drip-pricing,” should the practice continue.
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