Illinois AG: Grubhub to pay $25M settlement due to deceptive business practices

(WAND News) – Grubhub is on the hook for a $25 million dollar settlement after the Federal Trade Commission and the Illinois Attorney General took action against business practices they deemed deceptive.

The unlawful practices alleged by the AG include deceiving diners about delivery costs and blocking their access to their accounts and funds, deceiving workers about how much money they would make delivering food, and unfairly and deceptively listing restaurants on its platform without their permission.

In addition to paying to settle the charges, the company must also make big changes to its operations under the proposed settlement. Changes include being transparent about the full cost of delivery, honestly advertising pay for drivers, and only listing restaurants on the platform with their consent.

“This settlement is the culmination of a multi-year investigation into deceptive and illegal business practices perpetrated by Grubhub,” said Illinois Attorney General Kwame Raoul. “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.”

The settlement includes a monetary judgment of $140 million against Grubhub, which is partially suspended based on the company’s inability to pay the full amount. Grubhub will be required to pay $25 million, nearly all of which will be used to refund consumers harmed by the company’s conduct.

“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.”

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