United States of America: Issued interim ruling in FTC investigation into Grubhub for misleading advertising and pricing practices

On 17 December 2024, the Federal Trade Commission (FTC) and Illinois Attorney General announced a proposed settlement requiring Grubhub to pay USD 25 million to address alleged violations of consumer protection and competition laws. The charges include misleading consumers about delivery costs, blocking access to gift card funds without recourse, falsely advertising driver earnings, and listing unaffiliated restaurants on its platform without consent. Under the settlement terms, Grubhub must disclose the full cost of delivery, stop adding hidden fees, notify consumers if their accounts are blocked, and provide an appeal mechanism with timely access to funds if reinstated. It must implement a simple cancellation process for Grubhub+ subscriptions, issue annual reminders with instructions on cancelling, and cease listing unaffiliated restaurants without permission. Grubhub is also prohibited from making misleading claims about driver earnings and must substantiate advertised pay rates with written evidence. The settlement includes a monetary judgment of USD 140 million, partially suspended due to Grubhub's inability to pay in full, with USD 25 million to be paid primarily as refunds to affected consumers. If Grubhub misrepresents its financial status, the full amount will become immediately due."