Food delivery platform Gubhub will pay $3.5 million to settle a lawsuit brought by the District of Columbia. The company was in court over what the district describes as “deceptive trade practices”. Rather than take the case further, Grubhub has decided to settle. That settlement was confirmed by Washington DC Attorney General Karl Racine.
Racine says the settlement follows the service “charging customers hidden fees and using deceptive marketing techniques.” His office filed the lawsuit last year, alleging that Grubhub was misrepresenting Grubhub+ subscribers by offering “unlimited free delivery” while still charging a service fee.
Other accusations from the DC Attorney General include claims that Grubhub listed over 1,000 restaurants on its service without permission. The company has since ceased doing the things it was accused of.
Grubhub has previously called the lawsuit frivolous. At the time of the filing the company said it was “disappointed [the AG’s office has] moved forward with [it] because [the service’s] practices have always complied with DC law, and in any event, many of the practices at issue have been discontinued.”
My office reached a $3.5 million settlement with Grubhub for charging customers hidden fees and using deceptive marketing techniques.
As a result, $2.7 million will be returned to the consumers who were impacted, and it will have to shape up and disclose every fee separately.
— Archive: AG Karl A. Racine (@AGKarlRacine) December 30, 2022
The settlement will see Grubhub pay the $2.7 million to customers who were affected by its practices in the DC area. This payment will land in their Grubhub account or will be sent as a check if they do not use it within 90 days. An important addition considering some of the customers may not have the app anymore.
Furthermore, the company will also pay $800,000 in civil penalties to the District of Columbia.
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