Competition Bureau Proves Drip Pricing Is a Hot Button Topic
October 30, 2019
By Jennifer McKenzie and Amanda Branch
The Competition Bureau demonstrated its commitment to enforcing against the practice of drip pricing or hidden fees with its October 28, 2019 announcement of its investigation into FlightHub Group Inc. Specifically, the Bureau is investigating its representations for flight-related services such as seat selection and flight cancellation, which result in hidden fees. While the investigation is ongoing, the Bureau reached an agreement with FlightHub that prohibits it from using false or misleading representations on flighthub.com and justfly.com.
The announcement is on the heels of the July 2019 consent agreement reached between the Bureau and the Ticketmaster companies regarding its hidden fees for sporting and entertainment events. Under the consent agreement, Ticketmaster agreed to pay $4 million in penalties and $500k for the costs incurred by the Bureau. The Bureau’s investigations revealed advertised prices are deceptive because consumers pay mandatory fees that are added later in the purchasing process. This “drip pricing” resulted in consumers pay more than 20%, and in some cases 65%, above the advertised price.
The Ticketmaster case represented the fifth time since 2015 that the Bureau successfully took action against the advertising of unattainable prices online. (Other major case against car rental companies totally $9.95 million).
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