Introduction
On May 2, 2025, the Commissioner of Competition filed a new drip pricing application before the Competition Tribunal, challenging certain conduct of Canada's Wonderland Company ("Wonderland").1 This case represents the latest enforcement action targeting businesses that offer prices that the Commissioner alleges are unattainable due to undisclosed mandatory fees.2
The Complaint
The Commissioner asserts that Wonderland has been advertising its tickets, season passes, VIP lounge access and other park-related products at prices that are unattainable due to mandatory "processing fees" that are not included in the initial offered price. The Commissioner's application alleges that Wonderland has engaged in these deceptive practices since at least June 2022 when the Competition Act was amended to address drip pricing explicitly. The Commissioner's application indicates that Wonderland applied (and continues to apply) a fixed "processing fee" ranging from $0.99 to $9.99 to nearly all online transactions. According to the Commissioner, these fees are only revealed later in the purchasing process—often in fine print or after consumers have already invested time in selecting tickets and add-ons.
The Commissioner's application emphasizes the predictability of Wonderland's fee structure, arguing that because these fees were calculated using a defined and predictable set of rules (based on the types of products being purchased and the quantity of products being purchased), they qualify as "obligatory charges" under the Competition Act's drip pricing provisions, rendering the initial price representations false or misleading.
The Commissioner asserts that several aggravating factors should be considered (including many that are not specific to the Wonderland matter) when the Tribunal determines the appropriate administrative monetary penalty, including:
- the price representations are made across Canada;
- the Bureau first publicly-signaled its drip pricing concerns in 2015, with various public enforcement actions relating to drip pricing taking place from 2016-2020;
- the Competition Act was amended in 2022 to recognize drip pricing explicitly as being false and misleading conduct;
- the Bureau brought a successful drip pricing case against Cineplex (currently under appeal), resulting in an administrative monetary penalty of almost $39 million being ordered in late 2024 (reflecting the value of the revenues collected by Cineplex from the online booking fee that was at issue in that case); and
- the Bureau sent Wonderland a warning letter about its drip pricing on July 14, 2023, but Wonderland's conduct continued.
In terms of relief, the Commissioner seeks significant administrative monetary penalties, consumer restitution, and injunctive relief. These include:
- a formal declaration that Wonderland engaged in reviewable conduct under subsection 74.01(1)(a) of the Competition Act by making false or misleading price representations;
- injunctive relief in the form of a ten-year order preventing the company from engaging in similar drip pricing practices;
- substantial financial penalties, including an administrative monetary penalty in an amount to be determined by the Tribunal; and
- restitution to consumers.
In response to the Commissioner's application, on May 5, 2025, Wonderland issued a public statement that offers insight into its likely defence strategy:
"... "drip pricing" refers to the practice of promoting something at one price, while concealing the real price from consumers until later in the purchasing process...we provide our guests options so that they may choose products, including ticket or Season Pass products, that best suit their preferences. This flexibility determines the level of processing fee they pay. Not only are the Competition Bureau's allegations unsubstantiated, but its demands to prohibit processing fees – including variable fees – undermine consumer choice and flexibility. The Bureau is seeking to require static, all-inclusive pricing, an approach that can impose higher upfront prices for guests and reduced flexibility and choice." (emphasis added)
It appears that Wonderland may argue that its fees are variable (and therefore not "fixed obligatory charges or fees"), and that as consumers are informed that processing fees will be added Wonderland's representations are not false or misleading. In addition to the specific "drip pricing" claim, the Commissioner has pleaded and will likely argue, as he did in Cineplex, that the representations are false or misleading in a material respect and therefore contravene the general civil deceptive marketing provisions of the Competition Act.
Drip Pricing Under the Competition Act and the Cineplex Case
The case against Wonderland comes against the backdrop of recent amendments to the Competition Act. The Competition Act has long had criminal and civil provisions that prohibit the making of representations to the public that are false or misleading in a material respect for the purpose of promoting the supply or use of a product or business interest. However, in June 2022, the Competition Act was amended to deem drip pricing (as defined at subsections 52(1.3) and 74.01(1.1)) to be a false or misleading representation. This new provision states that representing a price that is unattainable due to fixed obligatory charges or fees constitutes a false or misleading representation, unless the fees are imposed on a purchaser of such products by a government (e.g., sales taxes).
Wonderland's public statement suggests that it may seek to argue that its processing fees are variable because they depend on the number of items purchased and/or the type of service that is purchased. Some aspects of the question were considered in the Cineplex case, but the facts of the Wonderland case are different and may engage these issues more directly.
The Tribunal in the Wonderland case may also consider the adequacy of Wonderland's disclosures concerning additional fees, and whether it is sufficient to avoid the representations being considered "drip pricing" and/or materially false or misleading.
Broader Implications for Businesses and Consumers
The outcome of this case will be of interest to every business that relies on multi-step purchasing processes or add-on fees. The Tribunal's ruling may confirm that "all-in pricing" is the only viable option for businesses to avoid the risk of allegations of misleading advertising. The Tribunal may also provide insight as to how and when fees may be adequately disclosed so as to avoid such allegations.
In the interim, as noted in the context of the Cineplex decision, we recommend businesses take the following actions:
- to the extent possible, include up front and clear disclosure of any mandatory fees;
- review online purchasing flows and website design;
- prepare for larger administrative monetary penalties and disgorgement orders; and
- prepare for expanded private rights of action which will be available imminently — as of June 20, 2025.
Footnotes
1. See the Competition Bureau's news release and the Commissioner's application before the Tribunal.
2. See our recent bulletin of February 4, 2025 regarding the recent Cineplex drip pricing case.
Co-authored by Tolu Ogidi (Articling Student)
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
