Food delivery giant Grubhub has agreed to pay $25 million to settle allegations from the Federal Trade Commission (FTC) and Illinois Attorney General’s office that it engaged in deceptive and unfair practices targeting restaurants, delivery drivers, and consumers. The settlement includes significant changes to Grubhub’s business practices as part of a broader crackdown on “junk fees.”
The FTC investigation found that Grubhub misled diners about delivery costs, blocked users from accessing their accounts, and falsely advertised earnings to potential delivery drivers. Regulators said these practices aimed at driving growth and market dominance at the expense of transparency and fairness.
Under the terms of the settlement, Grubhub must disclose true delivery costs upfront, eliminate hidden fees, provide a straightforward cancellation process for subscribers, and obtain consent from restaurants before listing them on its platform. The company also must notify users when their accounts are blocked and provide an appeal process.
While the $25 million settlement is less than the initial sought amount of $140 million, nearly all funds will be used to compensate consumers harmed by Grubhub’s practices. The FTC warned that misrepresenting its financial status could trigger full payment.
Source: https://www.salon.com/2024/12/22/regulators-target-grubhubs-pricing-shell-game-in-25-million-settlement-agreement