Grubhub has agreed to a $7.1 million settlement to resolve a class-action lawsuit alleging it falsely advertised partnerships with approximately 387,000 restaurants without their consent. The preliminary deal, pending judicial approval, provides clarityโand cashโto the affected businesses.
Settlement Breakdown:
- Scope of the Allegations: The lawsuit claims Grubhub listed restaurants on its platform and affiliated sites even though they had no formal agreement, causing damage to their reputation, customer confusion, and loss of revenue.
- Compensation Details: Eligible restaurant owners are slated to receive a base payment of $50, with additional compensation tied to how long they were listed on the platform.
- Legal Costs: Plaintiffs’ attorneys plan to request up to $2.4 million in legal fees from the settlement fund.
- Grubhubโs Position: The company denies any wrongdoing but says settling the case will allow it to focus on operations. It also noted that the practices in question โhave not been part of our business model for some time.โ
- Related Legal Troubles: In 2024, Grubhub paid $25 million to resolve similar allegations brought by the FTC and Illinois Attorney General involving misleading customers and restaurant listings.
Why This Matters
This settlement emphasizes the growing scrutiny over how digital platforms present partnerships and manage business listings. For restaurants and legal professionals, it underscores a critical principle: consent is keyโnot optionalโin business representations on digital platforms.
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