Competition Bureau sues DoorDash over alleged misleading prices
The Competition Bureau is suing DoorDash Inc. and its Canadian subsidiary over alleged “ drip pricing ,” which it says deceives consumers by not presenting an attainable price upfront.
The agency said legal action is being taken against the food delivery company after its investigation found that the addition of mandatory fees at checkout means customers are unable to purchase food and other items at the advertised price on DoorDash’s platforms.
“The company has been engaging in the alleged conduct for close to a decade, acquiring nearly $1 billion in mandatory fees from consumers,” the Competition Bureau said in a statement.
Drip pricing is when a company promotes its goods or services at a certain price and then tacks on (or “drips” in) additional costs at checkout. The Competition Bureau alleges that DoorDash promotes their online delivery services at a lower price than what consumers actually have to pay.
DoorDash charges its users various mandatory fees, including service, delivery, expanded range, small order and regulatory response fees. As a result, consumers end up paying higher prices or receiving lower discounts than advertised, the Bureau said.
It also alleges that the company represents certain fees to give the impression that they are taxes, even though they are charges imposed at DoorDash’s discretion.
The application filed with the Competition Tribunal asks DoorDash to “stop the deceptive price and discount advertising; stop portraying fees as taxes; pay a penalty; and issue restitution to affected consumers who purchased food and other items through DoorDash’s platform .”
Competition Bureau commissioner Matthew Boswell said the litigation against DoorDash is an effort to ensure consumers are not misled and can trust the prices they see online.
“Parliament has made it clear that businesses must not engage in drip pricing by advertising unattainable prices and then adding mandatory fees,” he said.
Boswell urges businesses to review their pricing practices and make sure they comply with the law .
• Email: dpaglinawan@postmedia.com
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