By FOX 5 DC Digital Team
Attorney General for the District of Columbia Karl A. Racine has filed a lawsuit against Grubhub for charging hidden fees and using deceptive marketing tactics during the COVID-19 pandemic to increase profits at the expense of consumers and local small businesses.
The Office of the Attorney General (OAG) alleges that Grubhub’s misleading practices harmed District residents who used its service, exploited local restaurants that were suffering during the pandemic, and violated consumer protection laws.
OAG’s lawsuit seeks to force Grubhub to pay penalties for violating District law.
In its lawsuit, OAG alleges that Grubhub violated the District’s Consumer Protection Procedures Act and harmed District consumers by:
– Running a promotion that falsely claimed to help struggling restaurants during the pandemic: In March and April 2020, Grubhub offered a promotion called “Supper for Support” that made it seem like the company was helping restaurants that were struggling because of the pandemic. Grubhub offered discounts to encourage users to order and ran ads saying: “Restaurants need us now more than ever,” “So we created Supper for Support to help out,” and “Together, we can help save the restaurants we love.” But Grubhub didn’t fully cover the costs of these discounts. Instead, it passed most of the costs of the discounts along to the already-struggling restaurants. Grubhub also forced the restaurants to pay its full commission—based on non-discounted prices—on the discounted orders. This promotion severely cut into restaurants’ already-small profit margins, and misled DC residents who believed their orders through Grubhub would help their favorite restaurants
Continue reading at Fox 5 DC.
