The Competition Bureau says it is taking Canada’s Wonderland to court because it alleges the company that runs the amusement and water park north of Toronto engages in “deceptive marketing practices.”
In a news release on Monday, the bureau accuses Canada’s Wonderland Company of “drip pricing,” a practice in which a company advertises “lower prices than what consumers ultimately have to pay as those prices exclude mandatory fixed fees.”
The bureau alleges that Wonderland, in particular, advertises items at a lower price than what consumers have to pay online. According to the bureau, drip pricing is considered “deceptive” because consumers are not presented with an “attainable” price upfront.
“Canadians should always be able to trust the initial advertised price,” Matthew Boswell, Commissioner of Competition, said in the release.
“We’re taking action against Wonderland because misleading tactics like drip pricing only serve to deceive and harm consumers. For years, we have urged businesses to display the full price of their products upfront. I remind all businesses to review their pricing claims to make sure they do not mislead consumers.”
Canada’s Wonderland, located in Vaughan, Ont., is a subsidiary of the U.S.-based Six Flags Entertainment Corporation.
The bureau’s application against Wonderland was filed on Monday with the Competition Tribunal, and the bureau said it is seeking a ruling that would stop Wonderland from allegedly engaging in “deceptive price advertising,” make Wonderland pay a penalty and issue restitution to affected consumers who paid for products through its website.
In the release, the bureau said it alleges that Wonderland has made and continues to make “false or misleading price claims” by advertising lower prices than what consumers are ultimately charged because those prices do not include mandatory fixed fees.
The bureau said it is against the Competition Act to advertise “unattainable” prices that do not include mandatory fixed charges or fees, unless those charges or fees are imposed by the government on purchasers. An example of such a fee imposed by the government would be the sales tax.
According to the bureau, Wonderland charges a processing fee for online purchases of park admission. That fee starts at $6.99 and increases to $8.99 or $9.99, depending on the number of items purchased, the bureau said.
For items that are not admission, it charges a single $0.99 processing fee, regardless of the number of items bought.
Wonderland denies engaging in deceptive practices
Wonderland, for its part, issued a statement on Monday saying the allegations made by the bureau are “unfounded” and the company will defend its “commitment to transparency and consumer value.” It said it is committed to providing its guests with “clear information and meaningful choice.”
“Under Canadian law, ‘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. Canada’s Wonderland does not engage in this practice,” Wonderland said in the statement.
“From the outset, our guests receive disclosure of any applicable fees. We ensure customers understand exactly what they are purchasing. It is also important that 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,” the statement says.
Wonderland said the bureau’s demands to prohibit processing fees, including variable fees, would undermine consumer choice.
“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,” it said.
“Canada’s Wonderland remains dedicated to transparency, customer choice and compliance to the law. We’d like to thank our guests for their continued trust and support as we continue to advocate for your interests and defend our practices.”
Bureau wants to help buyers, lawyer says
Drip pricing is a violation of the Competition Act, said Nikiforos Iatrou, a partner at McCarthy Tetrault, speaking in general, and not on this particular case, on Monday.
“Drip pricing is when a company is selling a good or a product and they advertise a particular price for that good or product. But then as you go through the buying process for that product, additional unavoidable fees are added to it,” he said.
“Now, there’s always taxes and things like that that are added to prices, but this is for prices that aren’t taxes or other mandatory fees that the government imposes.”
Iatrou said the bureau has looked at drip pricing in the case of car rentals, ticket prices for concerts and movies, and now it’s looking at amusement parks.
“Consumers — they have to make their buying decisions. And part of what the Competition Bureau is trying to do is make sure that the consumers have the right tools to make those decisions,” he said.
“And the Competition Act is designed, or an element of the Competition Act is there, to help promote this all in pricing to allow consumers to make these sorts of knowledgeable decisions.”
Wonderland, located on more than 120 hectares, has more than 200 attractions, including 18 roller coasters.