Attorney General Raoul, FTC Announce $25 Million Settlement With GrubHub Over Alleged Deceptive Business Practices
CHICAGO - Attorney General Kwame Raoul, in partnership with the Federal Trade Commission (FTC), announced a $25 million settlement agreement with Grubhub Inc. over its alleged deceptive business practices that harmed customers, delivery drivers and restaurants.
Get The Latest News!
Don't miss our top stories and need-to-know news everyday in your inbox.
Raoul’s office initiated an investigation into Grubhub’s practices after receiving dozens of consumer complaints about the company. The Attorney General’s office worked with the FTC on the investigation and nationwide settlement.
“This settlement is the culmination of a multi-year investigation into deceptive and illegal business practices perpetrated by Grubhub,” Raoul said. “I thank FTC Chair Lina Khan for another successful partnership between our offices that has resulted in relief for Illinois consumers, and I remain committed to holding businesses like Grubhub accountable for their deceptive business practices.”
“Our investigation found that Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhub—all in order to drive scale and accelerate growth,” said FTC Chair Lina M. Khan. “Today’s action holds Grubhub to account, putting an end to these illegal practices and securing nearly $25 million for the people cheated by Grubhub’s tactics. There is no ‘gig platform’ exemption to the laws on the books.”
The investigation revealed that Grubhub’s deceptive business practices negatively impacted participants in nearly every aspect of its transactions. Raoul alleges that Grubhub misled consumers about the cost of delivery and the benefits of a Grubhub Plus subscription; misled drivers about the amount of money they could make; and listed restaurants on Grubhub’s app without their knowledge or consent, and in some instances, over their explicit objections.
Consumers nationwide that were harmed by GrubHub’s deceptive practices will receive a total of $24.8 million in restitution. An additional $200,000 will go toward supporting the Illinois Attorney General’s consumer education and enforcement work.
In addition to restitution for customers, Attorney General Raoul’s office and the FTC ensured the settlement prevents such deceptive practices going forward.
Grubhub will be required to:
- Make clear and upfront disclosures of all fees associated with delivery and the total cost to the consumer.
- Provide verifiable proof of any potential earnings claims made to drivers when requested.
- Immediately remove any unaffiliated restaurants.
Grubhub will also be prohibited from adding restaurants without permission going forward.
Consumer Protection Division Chief Susan Ellis, Consumer Fraud Bureau Chief Greg Grzeskiewicz, Deputy Bureau Chief Jacob Gilbert, Consumer Counsel Thomas James, and Assistant Attorneys General William Wingo and Wilton Person handled the settlement for Raoul’s Consumer Fraud Bureau.
More like this:
- Most Popular
- Top Stories
- Most Recent
