From Cineplex To Wonderland: The Drip Pricing Rollercoaster – Advertising, Marketing & Branding

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:

1. 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;




2. injunctive relief in the form of a ten-year order preventing
   the company from engaging in similar drip pricing practices;




3. substantial financial penalties, including an administrative
   monetary penalty in an amount to be determined by the Tribunal;
   and




4. 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:

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:

1. to the extent possible, include up front and clear disclosure
   of any mandatory fees;




2. review online purchasing flows and website design;




3. prepare for larger administrative monetary penalties and
   disgorgement orders; and




4. 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