Competition Bureau suing DoorDash for allegedly misleading pricing

Canada’s Competition Bureau announced that it will be taking legal action against DoorDash for alleged misleading business practices, charging consumers more than what was advertised.

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Canada’s Competition Bureau announced that it will be taking legal action against DoorDash for alleged misleading business practices, charging consumers more than what was advertised.

The Bureau claims that DoorDash, an online food delivery service, has been promoting its service at allegedly deceptively lower prices compared to what customers would actually pay at checkout and promoting false discounts.

DoorDash is being accused of drip pricing— advertising a product at a lower price than what the consumer can truly attain due to the addition of mandatory fees. The practice was banned under the Competition Act in June 2022.

The Competition Bureau is alleging that the numerous mandatory fees that DoorDash adds, including service fees, delivery fees, expanded range fees, small order fees, and regulatory response fees, constitute drip pricing.

The Bureau also alleges that the food delivery service has been presenting certain fees as taxes when they are merely charges imposed at DoorDash’s discretion.

For nearly ten years, DoorDash has collected $1 billion in mandatory fees from Canadian consumers.

In the application filed before the Competition Tribunal, the Bureau demands that DoorDash stop its alleged deceptive price and discount advertising, cease portraying fees as taxes, pay a penalty, and compensate affected customers.

True North tried contacting DoorDash for comment. However, after numerous phone transfers, no comment was provided.

The Competition Bureau’s Commissioner Matthew Boswell said that the action against DoorDash helps ensure consumers are protected from deceptive business practices.

“Parliament has made it clear that businesses must not engage in drip pricing by advertising unattainable prices and then adding mandatory fees. The Competition Bureau has been fighting against this misleading practice for years,” said Boswell.

“Our litigation against DoorDash is another example of our efforts to ensure consumers are not misled and can trust the prices they see online. We urge all businesses to review their pricing practices and make sure they comply with the law.”