DECEPTIVE MARKETING OF ON-LINE AIR TICKETS By Gavin Murphy (Article)
The old adage appears to ring true yet again: If it sounds too good to be true it probably is.
The Canadian Competition Bureau
Canada’s Competition Bureau (Bureau), which assists the Commissioner of Competition (Commissioner) in the administration and enforcement of the Competition Act (Act),  announced on 28 October 2019 that the Commissioner has taken steps to protect consumers against misleading representations in the airline industry. The Commissioner entered into a temporary consent agreement (agreement)  with FlightHub Group Inc (FlightHub) , while continuing an investigation into FlightHub for alleged false and misleading marketing practices  in relation to hidden fees charged for flights on the Flighthub.com and JustFly.com online websites. 
The agreement, the first ever concluded in the 35 year history of the Act, is designed to take the place of a temporary order or interim injunction.  According to Commissioner Matthew Boswell: “Early in my term as Commissioner of Competition, I made a commitment that the Bureau would use all the tools at its disposal to address deceptive marketing practices in the online marketplace. Today’s agreement protects consumers from harm while the Bureau carries out its investigation.” 
The Bureau’s investigation relates to hidden fees for services such as seat selection and flight cancellation and rebooking, resulting in additional charges and higher prices, which the Commissioner and Bureau claim may have benefitted FlightHub by millions of dollars.  They also suggest the price of flights may have increased after consumers have selected their preferred choice. The Bureau has reviewed “thousands of consumer complaints”  concerning the marketing practices of Fighthub.com and justFly.com, and in 2019 executed search warrants at FlightHub’s Montreal-based headquarters and seized relevant documents.
FlightHub is co-operating with the Bureau’s investigation. “FlightHub commends the Competition Bureau for driving best practices in the online marketplace, and we take pride in leading the way across the online travel industry in Canada. Our willingness to enter into a temporary consent agreement with the Canadian Competition Bureau reinforces our commitment towards this goal.” 
Temporary consent agreement.
The agreement was approved by the Commissioner and FlightHub in accordance with s. 74.11(1) of the Act  and filed at the Competition Tribunal (Tribunal).  FlightHub will comply,  within 20 days (effective 25 October 2019) of the signing of the agreement, with all of the relevant provisions of the deceptive marketing practices provisions of the Act. More specifically, FlightHub is prevented from making any false or misleading representation to consumers regarding seat selection without paying additional fees, as well as cancellation and rebooking options without customers paying further charges. Paragraph 5 of Part II of the agreement adds: Within 20 days of the Execution Date, the Respondent [FlightHub] shall not make any representation to the public that conveys a materially false or misleading general impression with respect to the cost of Flights.
Without limiting the generally of the foregoing, the Respondent shall not make any false or misleading representation to the public that conveys the literal meaning or general impression that a consumer can purchase a Flight at the price represented, taxes and fees included, where the consumer is subsequently charged a higher price.
There is nothing more annoying (and anti-competitive) for travellers than to see a good price for a fight online only to discover the final cost is significantly higher. After receiving numerous complaints about the business practices of FlightHub, the Bureau took action in a timely manner as the winter season loomed with increased air travel by Canadians to sun destinations. The Bureau’s move was also consistent with the state of California, where the city of San Francisco sued the organisation on behalf of the people of the state for deceptive business practices the month before.  The agreement will protect consumers until the Bureau reaches a resolution with FlightHub, or there is a decision of the Tribunal.
Explained Josephine Palumbo, deputy commissioner of the deceptive marketing practices directorate of the Bureau, in early 2020: “While the Bureau continues its ongoing investigation into the marketing practices of FlightHub, we negotiated a temporary consent agreement that prohibits FlightHub from using false or misleading marketing practices on Flighthub.com and Justfly.com. As part of this agreement, FlightHub will not mislead consumers into believing that the company will reserve a specific seat, or offer flexible cancellation and rebooking options, nor will it mislead consumers about the cost of fights.”[Josephine Palumbo, “Honest Advertising in the Digital Age”, address to the Canadian Institute 26th annual advertising and marketing law conference, Toronto, 22 January 2020; available at: https://www.canada.ca/en/competition-bureau/news/2020/01/honest-advertising-in-the-digital-age.html [accessed 24 January 2020].
 Competition Act, RSC 1985, c. C-34 (as amended). The Canadian Competition Bureau takes steps against misleading representations in online sales of airline tickets (FlightHub) ANTICOMPETITIVE PRACTICES, INVESTIGATIONS / INQUIRIES, MISINFORMATION, SERVICES, EFFECT ON COMPETITION, CONSUMER PROTECTION, CANADA, INTERNET, TRANSPORT (AIR), ONLINE PLATFORMS Canadian Competition Bureau, FlightHub, CT-29-003, 28 October 2019 October 2019 Gavin Murphy | Université d’Ottawa - University of Ottawa e-Competitions News Issue October 2019 e-Competitions Antitrust Case Laws e-Bulletin This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and maybe punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 1 Gavin Murphy |Concurrences | N°93125
 The Commissioner of Competition and FlightHub Group Inc, CT-29-003, 28 October 2019; available at: https://www.ct-tc.gc.ca/CMFiles/CT-2019- 003_Registered%20Consent%20Agreement_2_67_10-28-2019_1976.pdf [accessed 24 January 2020].
 FlightHub opened in 2012 and rose rapidly to become one of North America’s most successful online travel agencies focussing on flights. It is committed to offering the cheapest airline tickets in an increasingly competitive market and serves over 1,000,000 Canadians annually.
 See Part VII.1, the deceptive marketing practices provisions of the Act. These sections are civil reviewable matters. There are also criminally-based false and misleading representations provisions in the Act. See in this regard s. 52.
 Advertised airfares for flights originating in Canada must include all relevant fees and taxes so the public can easily calculate the overall cost. This provision does not apply to optional services or amenities (but these options must be shown with cost and tax included). Flights originating from outside Canada, package travel services, loyalty rewards programs and charter services booked through corporate travel offices or obtained through a global distribution service are not subject to these provisions. See Part V. 1, Air Transportation Regulations (SOR 88/58); available at: https://laws-lois.justice.gc.ca/eng/regulations/sor-88- 58/FullText.html [accessed 27 January 2020].
 Michael G Osborne, Cassels, “FlightHub Agrees to First Ever Temporary Consent Agreement,” 30 October 2019; available at: https://cassels.com/insights/flighthub-com-agrees-to-first-ever-temporary-consent-agreement/ [accessed 27 Jan 2020].
 Competition Bureau, “Competition Bureau takes action on false or misleading marketing practices in online flight sales,” 28 October 2019; available at: https://www.canada.ca/en/competition-bureau/news/2019/10/competition-bureau-takes-action-on-false-or-misleading-marketing-practices-in-online-flightsales.html [accessed 24 January 2020].
 Ibid. This phrase is also adopted in the ‘whereas’ clauses of the agreement.
 Christopher Cave, FlightHub chief operations officer, “FlightHub Leads the Way In Improving Online Travel Shopping Experience for Consumers,” 28 October 2019; available at: https://www.newswire.ca/news-releases/flighthub-leads-the-way-in-improving-online-travel-shopping-experience-for-consumers899654936.html [accessed 27 January 2020].
 Section 74.11(1) of the Act says: “On application by the Commissioner, a court may order a person who it appears to the court is engaging in conduct that is reviewable under this Part not to engage in that conduct or substantially similar reviewable conduct if it appears to the court that (a) serious harm is likely to ensue unless the order is issued; and (b) the balance of convenience favours issuing the order.”
 The Competition Tribunal is a specialised administrative tribunal that hears applications commenced by the Commissioner or, with leave, by private parties under the civil reviewable matters sections of the Act.
 See in this regard Part II of the agreement.
 See People of the State of California v JustFly Corp. et al, San Francisco Superior Court, case # CGC-19-579328, 19 September 2019; available at: https://webapps.sftc.org/ci/CaseInfo.dllSessionID=9A779359164B5F5F3153A1599672DCA7A0054C39&URL=https%3A%2F%2Fimgquery.sftc.org%2FSha1_newApp%2Fmainpage.aspx%3FWeb_Server%3Dimgquery.sftc.org%26MINDS_Server%3Dhojimx-01%26Category%3DC%26DocID%3D06985194%26Timestamp%3D20200127124501%3D258f02d721910c950665f14a6f765e1fd1cc8be5 . According to Dennis Herrera, city attorney of San Francisco, who sued on behalf of the people for unlawful and deceptive business practices: “JustFly is not in the travel business. They’re in the hidden fee business.” City attorney of San Francisco, “Herrera sues JustFly and FlightHub over hidden fees and other predatory scams,” 19 September 2019; available at: https://www.sfcityattorney.org/2019/09/19/herrera-sues-justfly-and-flighthub-over-hidden-fees-and-other-predatory-scams/ [both accessed 24 January 2020].
[15 ]Josephine Palumbo, “Honest Advertising in the Digital Age”, address to the Canadian Institute 26th annual advertising and marketing law conference, Toronto, 22 January 2020; available at: https://www.canada.ca/en/competition-bureau/news/2020/01/honest-advertising-in-the-digital-age.html [accessed 24 January 2020].
This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document constitutes a violation of the publisher's rights and maybe punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L 335-2 CPI). Personal use of this document is authorised within the limits of Art. L 122-5 CPI and DRM protection. www.concurrences.com 2 Gavin Murphy |Concurrences | N°93125