Canada's Competition Bureau filed a lawsuit Monday against food delivery giant DoorDash, alleging the company has misled consumers for nearly a decade by advertising prices lower than what customers ultimately pay.
The federal antitrust watchdog accuses DoorDash and its Canadian subsidiary of "drip pricing," a practice where mandatory fees appear only at checkout, making advertised prices unattainable. The bureau seeks to stop the alleged deceptive advertising, impose penalties, and secure restitution for affected consumers.
DoorDash charges numerous mandatory fees beyond advertised prices, including service fees, delivery fees, expanded range fees, small order fees, and regulatory response fees123. According to the Competition Bureau, the company has collected nearly $1 billion from these mandatory charges over the past decade14.
The bureau's investigation found that some fees are portrayed as taxes when they are actually charges imposed at DoorDash's discretion523. "Parliament has made it clear that businesses must not engage in drip pricing by advertising unattainable prices and then adding mandatory fees," said Matthew Boswell, Commissioner of Competition3.
DoorDash rejected the allegations, calling the lawsuit a "misguided and excessive attempt" to target the company1. A company spokesman said DoorDash fees are clearly labeled and disclosed to consumers, including a final review before payment1.
"To be crystal clear, DoorDash does not hide fees from consumers or mislead them in any way," the spokesman said12. The company characterized the legal action as "an overly punitive attempt to make an example of an industry leader in local commerce"2.
The lawsuit represents the latest salvo in Canada's intensifying crackdown on drip pricing, which became explicitly illegal under Competition Act amendments that took effect in June 202212. In September, the Competition Tribunal ordered cinema chain Cineplex to pay $38.9 million for charging undisclosed online booking fees345.
Other companies penalized for drip pricing include TicketNetwork ($825,000), Ticketmaster ($4 million), and SiriusXM Canada ($3.3 million)5. DoorDash already faces class-action lawsuits in British Columbia and Quebec over similar fee practices67.
"We believe that this is an overly punitive attempt to make an example of an industry leader in local commerce," DoorDash said8.
