After nearly a decade-and-a-half court battle, the Quebec Court of Appeal ordered Air Canada to pay $10 million in punitive damages for violating Quebec’s version of the drip pricing law.
Drip or unbundled pricing is the practice of initially advertising a base price to draw in consumer interest and then advertise an “all-in” price with the additional mandatory taxes and fees right before a consumer must make a purchasing decision.
This is the second major decision against a Canadian company for engaging in drip pricing in the last 12 months, with the Competition Tribunal recently ordering Cineplex to pay nearly $40 million for similar conduct.
Key takeaways
- No compensatory damages (this time), but future claims possible: While the Court of Appeal declined to award compensatory damages, it made clear that such damages could be available in the future. The Court was not satisfied that the damages suffered amounted to the difference between the initial posted price on the search results page and the price that a consumer would have to pay on the checkout page. The Court explained that if plaintiffs can demonstrate actual harm suffered by consumers, such as financial loss due to misleading pricing, compensatory damages could be awarded in addition to punitive damages. The Court acknowledged the complexity of this analysis and left the door open to alternative approaches. We anticipate further guidance on this point as more cases are litigated.
- Punitive damages awarded for drip pricing violations: The Court of Appeal disagreed with the lower court decision and ordered significant punitive damages despite the absence of evidence that consumers were misled or suffered economic loss. The Court pointed to the continuation of the practice even after the company received a warning to alter how the company displayed its pricing.
- Important compliance reminder: Although the decision comes out of the Quebec Court of Appeal, the Competition Act contains a similar prohibition against drip pricing. Beginning on June 25, 2025, private parties will be able to bring applications to the Competition Tribunal for a wider range of reviewable practices, including drip pricing. Competition Tribunal proceedings can move more quickly than cases in superior court.
If you have any questions about price displays, please contact a member of our competition law group or your usual MLT Aikins contact.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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