The Competition Bureau announced this week that Hertz and Dollar Thrifty have agreed to pay an administrative monetary penalty of $1.25 million and to implement compliance procedures to resolve the Bureau’s investigation of “drip pricing” by the companies. “Drip pricing” refers to advertised prices that are not in fact attainable, due to additional non-optional charges that must be paid by consumers.
The Hertz and Dollar Thrifty pricing reps appeared in many media, including websites, mobile apps, and email. The Bureau took issue with advertised price levels and discounts that ignored mandatory additional fees, as well as inaccurate descriptions of fees as taxes or surcharges imposed by governments.
In recent years, the Competition Bureau has repeatedly targeted drip pricing and misleading descriptions of mandatory fees. Avis and Budget agreed to pay an AMP of $3 million in 2016 to settle similar pricing allegations. Comwave also settled allegations of drip pricing in ads for its communications services in 2016.
These settlements serve as an important reminder that misleading pricing practices are an enforcement priority for the Bureau. Misleading price claims – in digital and traditional media – cannot be corrected by subsequent disclosure to a consumer, and may be the subject of significant monetary penalties.
In the digital context, CASL amendments to the Competition Act have enhanced the need for vigilance in email marketing campaigns. Under these amendments, a false or misleading representation in the sender or subject matter information of a commercial email may be sanctioned, regardless of whether the misrepresentation is misleading in a “material respect”. Furthermore, conduct contrary to these requirements may be the subject of private action, including class actions, for statutory and other damages, effective July 1, 2017.
All this to say, consistent application of comprehensive internal compliance policies to all digital and traditional marketing campaigns is critical, to avoid significant exposure for non-compliance with Canadian marketing laws.