Grubhub fined for promises of "free" orders via subscription, unauthorised restaurant listings, and hidden fees.
Excerpt
Our analysis
In March, DC Attorney General Karl Racine filed a lawsuit against Grubhub. Grubhub was accused of falsely promising "free" online orders to customers and "unlimited free delivery" for Grubhub Plus subscribers. The lawsuit alleges that Grubhub still charged service fees for non-pickup orders from Grubhub Plus customers and both delivery and service fees for standard orders. Grubhub was also criticized for bundling service fees with sales taxes and listing restaurants on the platform without their permission. Grubhub launched microsites resembling real restaurant sites to route orders through their platform. Grubhub refuted the claims but stated that some practices had been discontinued. Grubhub settled the lawsuit and placed refundable credits in the accounts of affected customers.
Outcome
Under the settlement, affected customers will receive $2.7 million in refunds, distributed as refundable credits to Grubhub accounts, with unclaimed funds being issued as checks after 90 days; additionally, a civil penalty of $800,000 will be collected by the District; Grubhub is mandated to transparently display fees and price differences at checkout.
Parties
District of Columbia and Grubhub Holdings
Case number
Civil Action No. 2022 CA 001199 B
Decision
Related deceptive patterns
Hidden costs involve obscuring or omitting additional fees, charges, or costs until the user is well into the purchasing or sign-up process. By that point, the user has already invested time and effort into the transaction and is more likely to proceed despite the unexpected costs.
Forced action involves a provider offering users something they want - but requiring them to do something in return. It may be combined with other deceptive patterns like sneaking (so users don't notice it happening) or trick wording (to make the action seem more desirable than it is). Sometimes an optional action is presented as a forced action, through the use of visual interference or trick wording. In cookie consent interfaces, forced action is sometimes carried out through "bundled consent". This involves combining multiple agreements into a single action, and making it hard or impossible for a user to selectively grant consent.
Related laws
Outlines various unfair or deceptive trade practices, including misrepresenting goods or services, falsely claiming affiliations, quality, or characteristics, and using innuendo to mislead