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Attorney General Kwame Raoul said he launched an investigation
into the 20-year-old operation after receiving “dozens” of
consumer complaints and engaged the FTC on the nationwide
settlement.
“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,” FTC chairperson Lina M. Khan said.
Chicago-based Grubhub, which allows consumers to order delivery
from nearby restaurants via drivers contracted with the company,
will pay $24.8 million in restitution, while $200,000 will fund
the attorney general's consumer education and enforcement
operations.
Raoul and Khan said the investigation found that Grubhub engaged
in illegal practices by misleading customers about the cost of
delivery and the benefits of a Grubhub subscription, deceived
drivers about the amount of money they could make, and listed
restaurants on its app without their knowledge or consent — and
in some cases over their objections.
In a statement, Grubhub denied wrongdoing. It said the company
is committed to openness in its practices and said it cooperated
with the FTC in its multiyear review.
“While we categorically deny the allegations made by the FTC,
many of which are wrong, misleading or no longer applicable to
our business, we believe settling this matter is in the best
interest of Grubhub and allows us to move forward,” the
statement said.
In addition to the settlement payment, Grubhub said it will make
changes to its platform to make it easier for diners to
understand fees and to better explain what delivery drivers
could earn.
The settlement also requires Grubhub to immediately remove from
its listing any unaffiliated restaurants, Raoul said.
The FTC said it doesn't yet know how many consumers may benefit
from the payout. After court approval of the agreement, the
agency will put together a remediation plan.
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