Steve Szentesi just wants the price-dripping cases to go away
A few days ago a new Competition Bureau news release arrived in my inbox: “StubHub to pay $1.3 million penalty for advertising unattainable prices for event tickets.”
StubHub, StubHub … was this the same as FlightHub? Airline tickets, sporting tickets, car rentals? Why did this ring a bell?
Click, scan, then it hits me: another online price claims case.
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I felt like I was in an advertising law Groundhog Day. I’m in Punxsutawney Drip Pricing Land. Sonny and Cher’s “I Got You Babe” in my world is “I Ain’t Gonna Tell You the Price, Babe.” Every day. Forever. These can’t be my clients, I say to myself when I read the release -- and they’re not.
It’s just another sequel in a seemingly unrelenting and cruel loop of drip-pricing cases of companies that couldn’t, according to the Bureau, figure out how to tell customers upfront what their prices are without dribbling it out slowly through the check-out process.
In my reality, the alarm goes off on another morning, I wander over to my desk, open my mail, and am punished with yet more drip-pricing enforcement.
I’ll have to read it to advise clients. When I do, yep, same facts (more or less) as the last one, and the one before that: online price, mobile and e-mail price claims that don’t disclose the full price, additional mandatory fees disclosed later in the check-out process (if at all), and significantly higher prices than initially disclosed.
Was there a valid agreement? Were consumers eventually told what the real price was? Irrelevant, says the Bureau. The general impression of StubHub’s marketing was that sports and entertainment tickets could be purchased for significantly lower prices than was the case -- in some cases, nearly 30 per cent lower.
The law is pretty clear here. If you make claims to the public that could influence their purchasing decision that are false or misleading, those claims can violate the criminal or civil provisions for misleading advertising under the Competition Act. Not surprisingly, people rely on advertised price in deciding whether to buy something, online or otherwise. Low price, good. High price, bad. Hidden price, very bad to advertising law enforcement agencies.
So there’s the law. Context, of course, matters, so whether something is false or misleading can depend on how the claim is made, where it is placed in marketing (e.g., in a headline claim, a disclaimer or on a subpage), whether disclaimers effectively add to or qualify a claim, and so on.
The bottom line, however, is that it’s really not that hard. Fully disclose the price upfront and clearly to consumers before they commit to your product. If there are additional fees, disclose them, too.
There it is: full price disclosure. The price, the whole price and nothing but the price.
Why, then, do these drip-pricing cases keep coming?
In 2015, Aviscar Inc. and Budgetcar Inc. agreed to pay $3 million to settle a drip-pricing case relating to car rentals and related products. Drip. In 2017, Hertz Canada Ltd. and Dollar Thrifty Automotive Group Canada Inc. agreed to pay $1.25 million. Drip. In 2019, Ticketmaster Canada LP agreed to pay $4 million for making allegedly misleading pricing claims in online sports and entertainment ticket sales. Drip. In 2019, the Bureau secured a temporary consent agreement with FlightHub Group Inc. while it investigates its online pricing practices. Drip. And now ticket reseller StubHub Canada Ltd. and StubHub Inc. has agreed to pay $1.3 million for online and other pricing claims for sports and entertainment tickets.
The Bureau must surely also feel as though it is in some kind of cruel drip-pricing claims enforcement loop.
It’s certainly not for lack of communication. In 2015, following the Budget/Avis case, the Bureau said: “prices advertised to consumers, including on digital platforms, must be accurate.” In 2017, it issued a specific warning to sporting and entertainment ticket vendors to display the real price of tickets upfront. In 2019, it said in connection with its investigation of FlightHub that it would “continue to seek out, investigate and halt deceptive marketing in the online marketplace.” And earlier this month, in conjunction with its settlement with StubHub, it said that “prices advertised online for event tickets should reflect the true cost of buying those tickets.”
After five years of drip-pricing cases, it strikes me that there are two plausible explanations as to why they continue. The first is that failing to disclose upfront the full cost of products is simply too profitable to stop; the second is that the negotiated penalties are too low. Of course, both could be true.
My humble counsel?
To companies (excluding my own clients, of course, who know the law well): clearly disclose the full price of your products upfront. It really isn’t that hard.
If you like, I will send you an opinion with my advice. The advice will fit on one line: “Fully disclose the price, the full price and nothing but the price. In all media, period.” And, full upfront disclosure of my fee: nothing. Really, it’s worth it to me to never have to read about another drip-pricing case again.
As for the Bureau, with the greatest respect, higher negotiated penalties may be in order. Do it for our mutual sanity. Alternatively, you could negotiate a further term in future drip-pricing consent agreements: requiring the marketing personnel of the companies to go through the same check-out process for a misleading claim, say, 500 consecutive times. For bonus points, ask marketing personnel to get the price advertised upfront for a reduced penalty.
In sum, please, to digital marketplace and esteemed e-commerce companies: let me wake up again to “I Got You Babe” and never see another drip-pricing case notification in my inbox again.
