Commerce Commission Alleges Systemic Deception in City Fitness Pricing Strategy

The Commerce Commission alleges City Fitness used "cynical" marketing by excluding mandatory fees from advertised prices, generating $1.6 million in 16 months.

By: AXL Media

Published: Apr 30, 2026, 5:24 AM EDT

Source: RNZ Pacific

The Core of the Pricing Dispute and Fee Structure

The legal battle centers on a 3 percent "transaction fee" that the Commerce Commission claims was omitted from City Fitness' primary advertised membership rates. According to the prosecution, the gym chain presented an "attractive looking number" to the public while hiding the compulsory nature of the additional cost. Furthermore, the commission alleges that labeling the charge as a "transaction fee" was fundamentally misleading, as the revenue generated was not strictly related to the actual costs of processing membership payments. Between the start of the investigation and the court date, this fee structure generated approximately $1.6 million in revenue, which the commission argues was obtained through illegitimate marketing practices.

Allegations of Reckless Marketing and Competitive Advantage

In court on Thursday, April 30, 2026, commission lawyer Jacob Barry characterized the pricing strategy as a "cynical marketing ploy." The prosecution argued that City Fitness recognized a significant market benefit in displaying lower-than-actual prices to entice sign-ups. Strategic analysis of the case suggests that by undercutting the visible prices of competitors, the chain may have skewed consumer choice toward their services based on "consciously false" information. The commission further noted that City Fitness continued the advertising campaign even after being formally notified of the investigation, a move the prosecution labeled as reckless behavior that prioritized market share over regulatory compliance.

Defense Arguments: Carelessness Versus Intentional Deceit

Representing City Fitness, James Every-Palmer KC contested the narrative of deliberate deception, instead framing the issue as a "flawed implementation" of an attempt to keep base prices low. The defense argued that while the gym chain may have been careless in its labeling, there was no evidence of actual harm to consumers. Every-Palmer asserted that customers would have become aware of the fee before the final payment stage and maintained that the labeling of the "transaction fee" likely did not influence a member's ultimate decision to join. He emphasized that the situation arose from administrative oversight rather than a strategic intent to mislead the public or gain a fraudulent advantage.