SPRINGFIELD, Ill. (AP) – Grubhub, an online food ordering and delivery platform, will pay $25 million to settle a dispute with the Illinois Attorney General and the Federal Trade Commission over allegations of deceptive business practices. officials announced Tuesday.
Attorney General Kwame Raoul said he launched an investigation into the 20-year-old operation after receiving “dozens” of consumer complaints and had discussed a nationwide settlement with the FTC.
“Grubhub defrauded customers, defrauded drivers, and unfairly harmed the reputations and revenues of restaurants not affiliated with Grubhub,” FTC Chair Lina M. Khan said in a statement. It was to accelerate it.”
Chicago-based Grubhub, which allows consumers to order delivery from nearby restaurants through drivers contracted with the company, will pay $24.8 million in damages and $200,000 in consumer education and compensation from the attorney general. Funds enforcement activities.
The investigation found that Grubhub engaged in illegal activity by misleading customers about delivery fees and the benefits of Grubhub subscriptions, deceiving drivers about how much they could earn, and listing restaurants on the app without their knowledge. He said it turned out that he had. Agree, and sometimes even in the face of opposition.
Grubhub denied wrongdoing in a statement. The company said it is committed to opening up its operations and cooperated with the FTC in its multiyear investigation.
“While we categorically deny the allegations made by the FTC, many of which are false, misleading, and no longer apply to our business, it is in Grubhub’s best interest to resolve this matter. We believe that we can move forward,” the statement said. .
In addition to paying the settlement, Grubhub said it will make changes to its platform to make it easier for diners to understand fees and to better explain what delivery drivers can earn.
Raul said the settlement also requires Grubhub to immediately remove unaffiliated restaurants from its list.
The FTC said it does not yet know how many consumers will benefit from the payments. After the court approves the agreement, the agency will put together a remediation plan.
