The Federal Trade Commission and Illinois’ Attorney General said Grubhub will pay $25 million to settle charges for unlawful practices, including charging over-inflated delivery costs. The settlement initially included a $140 million fine against the food delivery platform. However, due to Grubhub’s inability to pay the full amount, it is partially suspended. Although the company just has to pay $25 million for now, the full judgment will become immediately due if it is found that the company misinterpreted its finances just to get out of the higher fine, says FTC and Illinois Attorney General Kwame Raoul.
Amid all the chaos, Grubhub shared its side of the story. One spokesperson said, “While we categorically deny the allegations made by the FTC, many of which are wrong, misleading, or no longer applicable to our business, we believe settling this matter is in the best interest of Grubhub and allows us to move forward.”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 FTC and Raoul said they found a whole host of things Grubhub was doing to fraud its customers, workers and restaurants. According to them, Grubhub deceived customers about delivery costs and its workers regarding how much they could earn by delivering food. Moreover, they unethically and deceptively listed restaurants on their platform without permission.
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Now, Grubhub must disclose the true cost of delivering food to its customers and stop adding junk fees to orders. The company must also inform its customers if their accounts are blocked and stop listing unregistered restaurants on its platform.
Following the fine, Illinois’ Attorney General Kwame Raoul expressed his gratitude for the FTC and said, “I thank FTC Chair Lina Khan for another successful partnership between our offices that has resulted in relief for Illinois consumers.”
