Sirius XM subscribers paid drip prices, class action lawsuit claims

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Sirius XM Canada has overcharged its subscribers through “drip pricing,” or the illegal addition of hidden fees before the payment process, increasing prices by 10 to 20 percent, according to a proposed class action lawsuit filed by British Columbia on behalf of all Canadian subscribers.

The lawsuit, filed this week in British Columbia Supreme Court, comes a month after Sirius agreed to pay a $3.3 million penalty to the Federal Antitrust Office under a law that increases penalties for drip pricing, which is considered false or misleading under the office’s rules against deceptive marketing.

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Drip pricing involves offering a price for a product or service that is “unattainable” because a second price includes a mandatory fee that the consumer must pay to complete the purchase, the bureau explains.

Violations can be punished with a court-ordered fine and even a prison sentence of up to 14 years if the case is prosecuted criminally, the office said. In civil cases, companies face fines of up to $10 million for a first violation, according to the office.

The office also stated that a company could be forced to pay damages to its customers.

The purpose of the proposed class action lawsuit, in which Matthew Weinstein is a representative plaintiff, is to recover damages in the amount of the fees paid by the class members, according to the complaint filed in the Supreme Court of British Columbia.

Weinstein purchased a music and entertainment subscription through sirius.ca on April 13, 2023, and was required to pay “music royalties and administration fees” of one dollar for the first month and $3.61 per month thereafter. These fees were not disclosed until the end of the purchase process, the lawsuit says.

It says he and all other course participants were offered the plans on the website at certain prices, but when they went to complete the payment, they were told there was a mandatory fee, which meant they “received less than they expected.”

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“Consumers are entitled to clear and accurate information and should never be surprised by hidden or additional charges,” said Competition Commissioner Matthew Boswell in a statement on the agreement with Sirius.

The office said on its website that it has been cracking down on the so-called “drip pricing” strategy for many years, particularly in the car rental and online ticketing sectors, on the basis of competition law. It also encourages consumers to report examples of misleading marketing claims.

“The office’s intervention sends a clear message to the market that these types of business practices will not be tolerated,” Anna Maiorino, a spokeswoman for the office, said in an email.

“The Sirius penalty is the highest since the penalty increase in 2022.”

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