Grubhub agrees to a US$7.2M settlement over unaffiliated restaurants advertising allegations

USA – Grubhub has agreed to a nearly US$7.2 million settlement in a lawsuit originally filed in 2020, which alleged the company falsely advertised unaffiliated restaurants added to its platform without permission.

Court documents filed this week in the U.S. District Court for the Northern District of Illinois detail the settlement terms.

The case potentially involves up to 387,000 businesses whose names or logos may have been used on Grubhub or its affiliate websites without contractual agreements between January 1, 2019, and April 30, 2024.

These claims focused on Grubhub’s practice of listing restaurants without their consent.

This settlement follows a separate US$25 million agreement reached in December 2024 between Grubhub, the Federal Trade Commission (FTC), and the Illinois Attorney General.

That earlier case alleged the company deceived customers by imposing junk fees and adding restaurants to its service without permission.

Grubhub has denied any wrongdoing in both lawsuits but opted for settlement to resolve ongoing legal challenges and mitigate further reputational risk.

The company continues to operate amid increasing scrutiny over delivery platforms’ business practices.

The lawsuit accused Grubhub of engaging in deceptive practices that affected both restaurants and consumers, by listing establishments without contracts and potentially confusing customers about available dining options.

This settlement aims to compensate businesses whose names and branding were used on Grubhub’s platform without formal agreements, recognizing challenges faced by restaurants in controlling their online presence and customer experience.

Grubhub’s agreement also highlights growing regulatory attention on transparency and ethics within the online food delivery industry. These cases signal increased efforts by authorities to safeguard businesses and consumers from misleading practices.

The food delivery sector remains highly competitive, with companies balancing rapid expansion and platform growth alongside regulatory compliance and stakeholder relationships.

By settling, Grubhub hopes to rebuild trust with restaurant partners and customers while focusing on future innovation and service improvements.

The legal developments underscore challenges faced by digital platforms operating at scale, where contractual oversight and branding rights require continual attention.

Grubhub’s settlements may prompt other industry players to review listing policies and consumer fee disclosures to avoid similar disputes.

Addressing these issues is essential for maintaining industry credibility and fostering fair competition in the evolving food delivery market.

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