Grubhub will pay $25 million to settle a lawsuit from the Federal Trade Commission and Illinois Attorney General Kwame Raoul over allegedly unlawful practices that harmed diners, workers and small businesses, the FTC announced on Tuesday. The complaint claims that Grubhub deceived diners about delivery costs and blocked their access to their accounts.
The company also deceived workers about how much money they would make delivering food and listed restaurants on its platform without their permission. 'Our investigation found that Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhub — all in order to drive scale and accelerate growth,' FTC Chair Lina Khan said in a press release. Grubhub has had as many as 325,000 unaffiliated restaurants on its platform — more than half of all of the available restaurants on Grubhub, according to the complaint. The company allegedly listed unaffiliated restaurants in order to drive growth, but diners often had to pay more in delivery fees from those restaurants which, in turn, damaged their reputations. The complaint further alleged that Grubhub would often avoid removing unaffiliated restaurants off the platform when requested, instead trying to sell them paid partnership
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