Sirius to pay $3.3 million penalty to settle concerns over subscription price advertising
News release
June 5, 2024 – GATINEAU, (Quebec) – Competition Bureau
The Competition Bureau reached an agreement with SiriusXM Canada to address concerns over subscription price representations.
A Bureau investigation concluded that, outside the province of Quebec, Sirius advertised their satellite radio and streaming subscription plans at prices that are not attainable due to an additional mandatory fee, a practice known as drip pricing.
The Bureau determined that consumers could not buy subscription plans at the represented price because they were required to pay a Music Royalty and Administrative Fee. This additional mandatory fee increased the monthly cost of a plan by 10% to 20%.
The Bureau concluded that the company promoted its subscription services on its website, as well as in promotional emails and direct mail sent to Canadians.
As part of an agreement registered with the Competition Tribunal, Sirius agreed to:
- pay a $3.3 million penalty and an additional $30,000 for the costs of the Bureau’s investigation;
- not engage in drip pricing, nor promote subscription plans at prices that are not attainable and;
- enhance its compliance program and implement new procedures to comply with the law
The Bureau acknowledges Sirius' cooperation during its investigation, as well as its voluntary compliance in relation to concerns over subscription price representations.
Quotes
“Canadians should be able to trust that the price they see is the one they pay. 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.”
Matthew Boswell
Commissioner of Competition
Quick facts
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Sirius offers subscription-based satellite radio and streaming content in Canada.
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Drip pricing is false or misleading under the Competition Act, unless the additional fixed charges or fees are imposed by the government, such as sales tax.
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As a result of amendments to the Competition Act in June 2022, drip pricing is now expressly recognized as a harmful business practice under the law.
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The Bureau has taken action against drip pricing for many years under the Deceptive Marketing Practices provisions of the Competition Act, notably in the car rental, and online sporting and entertainment ticketing industries.
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The Bureau recently issued a consumer alert to raise awareness and reporting of drip pricing.
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The Bureau strongly encourages anyone who suspects that a company or individual is making deceptive marketing claims to report it by using our online form.
Related products
Associated links
- Drip pricing and the Competition Act
- The Deceptive Marketing Practices Digest with update on drip pricing
- Recent changes to the Competition Act about drip pricing
- Misleading representations and deceptive marketing practices
- Deceptive marketing practices – Cases and outcomes
- Consumer and business alerts (canada.ca)
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The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. Competition drives lower prices and innovation while fueling economic growth.
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