Illinois AG’s and FTC’s Settlement Takes a $25 Million Bite Out of Grubhub

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  • Illinois AG Kwame Raoul and the FTC have settled with Grubhub Inc. and Grubhub Holdings Inc. (collectively, “Grubhub”) to resolve allegations that it engaged in deceptive business practices that harmed customers, food delivery drivers, and restaurants in violation of federal and state consumer protection laws.
  • In the complaint, the AG and the FTC allege that Grubhub harmed consumers by deceptively advertising flat-rate delivery fees but imposing additional fees at checkout; sharing misleading information about its subscription plan and making it difficult to cancel enrollment; and freezing accounts containing gift card funds while failing to notify diners or restore access. Grubhub is also alleged to have harmed drivers with misleading earnings claims, and restaurants by falsely representing them as affiliated businesses on their app and then pressuring the restaurants to contract with Grubhub.
  • Under the terms of the proposed settlement, Grubhub must pay $25 million, $24,800,000 of which will be paid to the FTC for consumer redress. Additionally, Grubhub is prohibited from misrepresenting fees or cancellation options, denying consumers access to their funds, and making misleading earnings claims to delivery drivers, among other terms.
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