Canadian competition law prohibits businesses putting two prices on one product and charging the higher of the two prices.
This concept of double ticketing was first introduced into Canadian law in 1975 to address stores listing two different prices for a single item; however, we are now seeing the concept being extended to today’s digital marketplace.
This trend commenced with the recent class action against Airbnb (2019 FC 1563) invoking section 54 of the Competition Act in the context of Airbnb showing a user one price for accommodation on the search results page, and a second, higher price that includes service fees on the listing page, then charging the customer for the higher price upon booking. This trend has continued with the B.C. Supreme Court recently certifying a class proceeding against an airline relating to its practice of charging passengers $25 to check their first bag (2021 BCSC 12).
Airline Class Action
The claim against the airline arises from inconsistent language in both its domestic and international tariffs with respect to whether or not passengers would be charged $25 to check their first piece of luggage. Both tariffs had provisions indicating that the first piece of checked luggage would be free of charge, and provisions indicating that there would be a fee on the first piece of luggage.
The plaintiff’s primary position was that because tariffs are published pursuant to government regulations, and form part of the contract with the passenger, they are continuously expressed to passengers. The airline’s position was that because passengers can buy an airline ticket without ever looking at the tariff, the free check bag price was not clearly expressed, as required by the Competition Act, and that the plaintiff failed to plead that the two prices were expressed at the time of supply.
Initially, the Court found that the plaintiff had not pled that the two tickets were expressed at the time of travel, or even that they were expressed at the same time and permitted the plaintiff to amend its notice of civil claim to plead the temporal requirement. The defendants conceded that the plaintiff had adequately pled claims for breach of contract and unjust enrichment.
The Court subsequently certified the Competition Act claim (2021 BCSC 351), finding that the plaintiff’s proposed amendments addressed the issues it had previously raised with respect to timing. In doing so, the Court rejected the defendants’ opposition to the amendments on the basis that the submissions effectively amounted to a request for the court to reconsider determinations it had already made on the basis of new arguments that were not made at the certification hearing.
The Court removed from the class individuals who flew on flights where the airline was not the entity that received the baggage fees.
The airline argued that commonality could not be established because the terms of its contracts with passengers differ depending on the circumstances surrounding each class member at the time of purchase. The Court rejected this argument and accepted the claim as a common issue. However, the court ordered a common issues trial on the basis that the tariffs were ambiguous insofar as they contain terms that contradict one another with respect to baggage fees, and thus needed to be properly construed.
The airline argued that because the determination of whether there was a juristic reason for enrichment would require an analysis of each individual contract, there could be no common issues in unjust enrichment. The Court rejected this argument, stating that the answer to this question will not differ between class members. The contract will either provide a juristic reason or not.
The Court found that the large number of claims, each for a small amount, made a class proceeding the only practical means of providing meaningful access to justice to the large number of individuals who may have a claim.
The airline raised the issue of double recovery due to a similar class proceeding in Saskatchewan with respect to baggage fees charged by it and another airline. Because that proceeding has not been certified, the Court found that any concerns about double recovery are mere speculation.
The Court found that the proposed representative plaintiff was suitable as she was subject to a contract of carriage with the airline during the class period and paid baggage fees for her first checked bag.
The Court therefore certified the plaintiff’s claims in relation to breach of contract and unjust enrichment and granted leave to the plaintiff to amend its notice of civil claim to plead the temporal requirement.
There may be a growing trend of certifying cases applying double ticketing provisions to online sales, but it does not mean that these claims will succeed at trial. Indeed, in both the Airbnb case and the airline case, the courts expressed skepticism about the merits of the plaintiffs’ cases. Nonetheless, businesses putting two prices on a product or service to lure customers but then charging the higher price face potential class actions.