SiriusXM Canada has reached a settlement with the Competition Bureau over so-called “drip pricing” that will see the satellite radio provider pay a $3.3 million penalty.
A bureau investigation found that outside the province of Quebec, SiriusXM advertised its satellite radio and streaming subscription plans at prices that were not attainable to consumers due to an additional mandatory “Music Royalty and Administrative Fee” which increased the monthly cost of a plan by 10 to 20%. The bureau says the offer was promoted across the company’s website, as well as in promotional emails and direct mail.
As part of the agreement registered with the Competition Tribunal, SiriusXM will cover the cost of the bureau’s investigation (an additional $30,000), in addition to the penalty. The company has also agreed not to engage in drip pricing, nor promote subscription plans at prices that are unattainable and has committed to enhancing its compliance program and implement new procedures compliant with the law.
“Canadians should be able to trust that the price they see is the one they pay,” said Commissioner of Competition Matthew Boswell, in a Competition Bureau release. “Consumers are entitled to clear and precise information, and should never be surprised by hidden or additional fees. Businesses should review their marketing claims and make sure their prices are always displayed upfront.”
Drip pricing has been formally recognized as a harmful business practice since 2022 following an amendment to the Competition Act. The bureau has taken previous action under the Deceptive Marketing Practices provision of the Act to take action in the car rental, online sporting and entertainment ticketing industries.
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