Information and Alerts

Government Actions 1

D.C. sues Grubhub for allegedly using deceptive trade practices

On December 29,2022  the business entered a Assurance of Voluntary Compliance with the Office of the Attorney General. The Assurance settles allegations that the business violated the District’s Consumer Protection and Procedures Act (CPPA), which prohibits a wide variety of deceptive and unlawful business practices. Under the CPPA, it is illegal to make misrepresentations about products or services, or to provide products or services that violate other District laws. Under the terms of the Assurance, the business agreed to pay $3.5 million, distributed as follows:

$2.7 million will be paid back to affected customers. Those with active Grubhub accounts will receive a refundable credit and if the credit is not used within 90 days the money will be sent to customers in the form of a check.
 
$800,000 civil penalty paid to the District. Additionally, Grubhub must significantly change its business practices to ensure compliance with District law in ways that will set the industry standard for disclosing pricing information to consumers. To ensure no future violations of the CPPA, Grubhub must:

- Prominently disclose to consumers when it presents search results that additional fees may apply at checkout;
- List the name and amount of each fee as a separate line item at checkout;
- Stop its practice of combining taxes and fees into one line item;
- Stop advertising that Grubhub+ subscribers receive “free delivery” and instead specify that the $0 delivery fee only applies to eligible orders and         that other fees may apply;
- Stop charging menu prices higher than those available at the restaurant itself unless it clearly discloses, both on the menu and at checkout,                 that prices may be higher on Grubhub; and
- Shut down all microsites for restaurants located in the District or transfer ownership to the restaurant.

For more details go here.

Government Actions 2

FTC, Illinois Attorney General Take Action Against Grubhub for Harming Diners, Workers, and Small Businesses

On December 17th, 2024 the Federal Trade Commission (FTC) along with the Illinois Attorney General filed has settled a lawsuit with the United States District Courts Northern District of Illinois.

Charges filed allege the business is in violation of Federal law by engaging in an array of unlawful practices including 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. Grubhub has settled for $25 million nearly all of which will be used to refund consumers harmed by the company’s conduct. 

The FTC has proposed orders for the business to follow that aims to stop the conduct and return money under the terms of a proposed settlement with the FTC and Illinois. 

Grubhub will be required to:

- Disclose the true cost of delivery and stop adding junk fees on to orders;
- Notify consumers if their account has been blocked, provide a way for consumers to appeal that decision, and quickly provide access to funds if the block is removed;
- Provide a simple cancellation mechanism for Grubhub+ subscriptions, and remind consumers who are subscribed about their subscription and how to cancel at least once a year;
- Stop listing unaffiliated restaurants on the Grubhub platform; and
- Only make driver earnings claims that are not misleading and that it can back up with evidence and in writing.

For more information, please click here for detail. 

Alert

In March 2023, BBB investigated GrubHub's business practices which was prompted by a large amount of complaints the BBB have received.  The complaints surrounded issues regarding the business not honoring their Gift card process, customer service is not helping process refunds and consumers getting locked out of accounts when a consumer is trying to pay for an order using funds from their account. 

Currently the business is working with the BBB to answer complaints and address issues with consumers.

On December 17th a recent Grubhub settled a $25 million FTC lawsuit over deceptive practices. 

Please review the details of the government action regarding involving business’ marketplace conduct the BBB profile of the business.   

Government Action: BBB reports on known government actions involving business’ marketplace conduct:

City of Chicago Files Consumer Protection Lawsuits Against DoorDash And Grubhub For Engaging In Deceptive And Unfair Business Practices

On August 27, 2021 the City of Chicago filed consumer protection lawsuits in the Circuit Court of Cook County Illinois. Charges filed allege the business is in violation of Chicago Municipal Code prohibiting deceptive and unfair business practices that harm restaurants and mislead consumers. Specifically, Grubhub published deceptive “routing” telephone numbers that they represented as the restaurant’s direct number, created and maintained “impostor websites” for restaurants, launched deceptive, promotional campaigns to “save restaurants” during the pandemic, while forcing participating restaurants to extend their contracts, cover the cost of the promotions, and pay them full commission on all orders, and violated the City’s emergency cap of 15% on restaurant commissions. The matter is pending. For more details go here.

Updated information as of 2/1/2022:

On December 27, 2021, the City of Chicago's complaint against Grubhub in the Circuit Court of Cook County was amended with new allegations that the food delivery company violated Chicago's consumer protection ordinances by:

- Deceptively and unfairly charging restaurants for customer refunds that Grubhub issues unilaterally, without the restaurants’ consent; 
-Deceptively advertising those consumers can “order online for free,” yet charging multiple fees on these delivery orders; 
-Falsely advertising that its monthly subscription service, Grubhub+, provides “unlimited free delivery,” while still charging subscribers a fee to complete each Grubhub delivery order; and 
-Deceptively and unfairly concealing that its restaurant search tool provides results that are not based solely on relevance to consumers’ search criteria; instead, rankings are tainted by undisclosed marketing fees.

To see the press release on this update, visit this link.