Canada’s Competition Bureau is suing food delivery company DoorDash, alleging it misled customers on some prices and offers, including discounts.
According to a release, the federal Competition Bureau says its investigation found that consumers ended up paying more than was advertised on the DoorDash website and mobile applications due to additional “mandatory fees at checkout.”
The bureau says this practice is commonly known as “drip pricing,” and calls it “deceptive” because the process lacks transparency.
In some cases, the bureau says the additional “fees” may be misclassified to customers as “taxes.”
“Parliament has made it clear that businesses must not engage in drip pricing by advertising unattainable prices and then adding mandatory fees,” commissioner of competition Matthew Boswell said in a statement.
“Our litigation against DoorDash is another example of our efforts to ensure consumers are not misled and can trust the prices they see online.”
In response to Reuters, DoorDash said it did not hide fees from consumers or mislead consumers and that the Competition Bureau was wrong.
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“We believe that this … is an overly punitive attempt to make an example of an industry leader in local commerce,” it said in a statement.
The Competition Bureau notes that changes to the Competition Act in 2022 “explicitly recognize drip pricing as a harmful business practice.”
DoorDash isn’t the first company that has been put under the microscope by the Competition Bureau.
Last year, the Competition Tribunal determined that furniture retailers Leons and The Brick used what it called deceptive marketing for some discount offers, and that Cineplex used similar methods with its online booking fees.
The Competition Bureau says it has filed an application with the Competition Tribunal, which will determine the next steps for DoorDash.
It’s unclear how much DoorDash may have to pay in fines, but the statement says that for close to a decade, the company has acquired “nearly $1 billion in mandatory fees for consumers.”
The Competition Bureau is also requesting that the tribunal force DoorDash to issue “restitution” to affected customers, although it’s not clear yet if or how those customers may be compensated.
— with a file from Reuters.
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Canada’s Competition Bureau sues DoorDash over customer prices
