On May 5, 2025 and June 2, 2025, Canada’s Competition Bureau (“Bureau”) announced that it was suing Canada’s Wonderland Company (“Wonderland”) and Door Dash Inc. and its subsidiary DoorDash Technologies Canada Inc. (“DoorDash”) for allegedly engaging in drip pricing in violation of the civil deceptive marketing practices provisions of the Competition Act (under Part VII.1) (see: Competition Bureau sues Canada’s Wonderland for allegedly advertising misleading prices and Competition Bureau sues DoorDash for allegedly advertising misleading prices and discounts).
In making its announcement against Wonderland, the Bureau stated:
“The Competition Bureau is taking legal action against Canada’s Wonderland Company for advertising park tickets and a variety of other items at a lower price than what consumers actually have to pay online. The Bureau alleges that Wonderland is advertising prices that do not include a mandatory fixed fee of $0.99, $6.99, $8.99, or $9.99.
Canada’s Wonderland charges a processing fee for online purchases involving park admission, starting at $6.99 and increasing to $8.99 or $9.99 depending on the number of items purchased. For most purchases of non-admission-related products, a single $0.99 processing fee applies, regardless of the number of items.
The Bureau alleges that Wonderland has made, and continues to make, false or misleading price claims by advertising lower prices than what consumers ultimately have to pay as those prices exclude mandatory fixed fees. This practice, commonly known as drip pricing, is deceptive because consumers are not presented with an attainable price upfront.”
In making its announcement against DoorDash, the Bureau stated:
“The Competition Bureau is taking legal action against DoorDash Inc., and its subsidiary DoorDash Technologies Canada Inc., for promoting their online delivery services at a lower price than what consumers actually have to pay.
A Bureau investigation found that consumers were unable to purchase food and other items at the advertised price on DoorDash’s websites and mobile applications due to the addition of mandatory fees at checkout. This practice is commonly known as drip pricing and is deceptive because consumers are not presented with an attainable price upfront.
DoorDash charges consumers numerous mandatory fees to deliver orders made online, including service fees, delivery fees, expanded range fees, small order fees and regulatory response fees. As a result, consumers end up paying higher prices or receiving lower discounts than advertised. The company has been engaging in the alleged conduct for close to a decade, acquiring nearly $1 billion in mandatory fees from consumers.”
OVERVIEW OF DRIP PRICING
UNDER CANADA’S COMPETITION ACT
Under Canada’s federal Competition Act, “drip pricing” (failing to disclose the full price of a product or service upfront with additional fees only disclosed, for example, in a long disclaimer or later in an online checkout process) can be challenged under the general civil or criminal misleading advertising provisions of the Competition Act (sections 52 and 74.01(1)(a)).
In addition to these general misleading advertising provisions, in 2022, amendments to the Competition Act added new civil and criminal prohibitions on drip pricing. These new drip pricing provisions were further strengthened under 2024 amendments to the Competition Act (Bill C-59) that now make it clear that the only additional fees that a seller can “drip” (i.e., not disclose upfront) are those imposed directly on a purchaser by provincial or federal legislation (e.g., sales taxes).
The Competition Act now defines drip pricing as follows: “… the making of a representation of a price that is not attainable due to fixed obligatory charges or fees … unless the obligatory charges or fees represent only an amount imposed on a purchaser of the product … by or under an Act of Parliament or the legislature of a province”.
Drip pricing has been one of the Bureau’s deceptive marketing enforcement priorities for a number of years along with false or misleading performance claims, ordinary selling price (OSP) claims and misleading endorsements/testimonials. For example, the Competition Tribunal ordered Cineplex Inc., a Canadian theatre chain, to pay $38.9 M CDN for drip pricing in September, 2024 (see: here and here).
POTENTIAL PENALTIES FOR DRIP PRICING
UNDER CANADA’S COMPETITION ACT
Some of the potential penalties for violating the civil deceptive marketing practices provisions under Part VII.1 of the Competition Act include Competition Tribunal or court orders to stop the conduct, publish a corrective notice, pay restitution to consumers and AMPs.
Following 2022 amendments to the Competition Act, the maximum AMPs for civil deceptive marketing increased: (i) for individuals, up to the greater of $750,000 ($1 million for each subsequent order) and three times the value of the benefit derived from the deceptive conduct; and (ii) for corporations, up to the greater of $10 million ($15 million for each subsequent order) or three times the value of the benefit derived from the deceptive conduct or, if the latter amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenues.
In addition, as a result of June 2024 amendments to the Competition Act (under Bill C-59), private parties are now able to seek leave from the Competition Tribunal to commence proceedings under the civil deceptive marketing practices provisions with the only leave requirement for standing being that the proceedings are in the “public interest”. For more information, see: Expanded Private Access to the Competition Tribunal Now in Force for Deceptive Marketing and Civil Agreements Under the Competition Act.
KEY COMPETITION BUREAU ALLEGATIONS
IN THE CANADA’S WONDERLAND AND DOORDASH CASES
Some of the Bureau’s key arguments against Wonderland and DoorDash in these two cases, which rely on both the general civil deceptive marketing practices provision of the Competition Act (section 74.01(1)(a)) and the standalone civil drip pricing provision (section 74.01(1.1)) (as well as, in the case of DoorDash, the electronic marketing provision under Part VII.1 (section 74.011)), include the arguments below.
For the Bureau’s Competition Tribunal Notices of Application in these two ongoing cases, see: here and here.
Canada’s Wonderland
Some of the Bureau’s key allegations against Wonderland in its Competition Tribunal application include the following:
- Park admission and related services (e.g., parking and Fast Lane passes) are unavailable at the advertised prices because they omit a mandatory fixed processing fee.
- It is only after consumers have selected the products they want to purchase that Wonderland adds a pre-determined and pre-set fixed processing fee to each purchase that ranges from $0.99 to $9.99.
- Wonderland applies a higher processing fee for some products (e.g., park admission, VIP lounge access or Fast Lane passes).
- The more products that a consumer selects, the higher Wonderland’s processing fee will be.
- As consumers navigate the product selection process, there is nothing to indicate that purchasing other products will impact Wonderland’s processing fees.
- Processing fees are obligatory because consumers must pay the fee to complete online purchases for virtually all of Wonderland’s products.
- Contrary to the standalone drip pricing provision of the Competition Act (section 74.01(1.1)), Wonderland’s processing fees are not imposed on consumers by or under federal or provincial legislation.
- Wonderland’s price claims are material for the general civil deceptive marketing provision given that “price is an essential element in every consumer purchasing transaction and is invariably material to a consumer’s decision making.”
- Wonderland’s alleged deceptive marketing practices have been aggravated, including by the fact that Wonderland has been engaging in drip pricing since June 2022 when the Competition Act was amended adding the new standalone civil drip pricing provision (section 74.01(1.1)), its conduct has a material impact on consumer behaviour and that it continues to engage in alleged drip pricing.
DoorDash
Some of the Bureau’s key allegations against DoorDash in its Competition Tribunal application include the following:
- False or misleading representations to the public regarding prices for delivery that are not attainable due to fixed obligatory charges or fees. According to the Bureau, these include service fees, delivery fees, expanded range fees and small order fees. Such fees, according to the Bureau, are required for consumers to complete orders on DoorDash’s websites or apps unless they are waived by DoorDash or a merchant.
- Misrepresentations regarding fees that are portrayed as government imposed. According to the Bureau, DoorDash also makes materially false or misleading representations that create the general impression that certain of its fees are government imposed, though these fees are controlled and imposed by DoorDash. An example that the Bureau provides includes where DoorDash combines its own service fees and small order fees with taxes. For more information about the general impression test under the Competition Act, see: General Impression Test.
- Misrepresentations regarding potential discounts that consumers can obtain. In this regard, one example that the Bureau provides is that DoorDash markets a blanket 25% discount off additional orders in headline claims (i.e., off entire orders), when its advertised discounts do not apply to its alleged additional obligatory fees.
- DoorDash’s alleged deceptive marketing practices have been aggravated, including by the fact that it engages in the conduct on a daily basis (and has done so for over nine years), its conduct has a material impact on consumer behaviour and it has persisted in its conduct “despite years of public warnings by the Commissioner that the practice was contrary to the [Competition Act]”.
- Since entering the Canadian market in November 2015, DoorDash has collected nearly $1 billion in its alleged mandatory fees, which represent a significant portion of its gross revenue from affected sales.
IMPLICATIONS
Drip pricing continues to be a top Bureau deceptive marketing enforcement priority, together with other key areas of enforcement including false or misleading price claims in general, false or misleading testimonials and endorsements, ordinary selling price claims and performance claims (including environmental claims).
While the Bureau has commenced many investigations and formal enforcement proceedings in relation to drip pricing in the past (see, for example, here), the Wonderland and DoorDash cases indicate that not only that this continues to be an enforcement priority for the Bureau, but that it wants to test the parameters of the new standalone drip pricing provisions of the Competition Act, which were first enacted in 2022 and amended in 2024.
It remains to be seen whether either of these cases will proceed to fully contested proceedings before the Competition Tribunal or, as is more common, will be settled under negotiated consent agreements with the respondents.
********************
SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
