D.C. Attorney General's Office Lawsuit Against Grubhub, March 2022
D.C. Attorney General's Office Lawsuit Against Grubhub, March 2022
D.C. Attorney General's Office Lawsuit Against Grubhub, March 2022
Civil Division
DISTRICT OF COLUMBIA
a municipal corporation
441 4th Street, N.W. Case No. _________________
Washington, DC 20001,
Plaintiff,
COMPLAINT FOR INJUNCTIVE
v. AND OTHER RELIEF
and
GRUBHUB, INC.
111 W. Washington Street, Suite 2100
Chicago, IL 60602
Defendants.
Plaintiff, the District of Columbia (the “District”), through the Office of the
Attorney General, brings this action against Defendants Grubhub Holdings, Inc. and
Protection Procedures Act (“CPPA”), D.C. Code § 28-3901, et seq. In support of its
INTRODUCTION
1. This consumer protection enforcement case seeks to remedy, and put an end
to, Grubhub’s deceptive trade practices with respect to its food delivery services in the
District of Columbia. Grubhub is a food delivery company that owns and operates a
software platform connecting consumers (who place food delivery orders from restaurants)
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with third-party drivers (who deliver food from restaurants to consumers). In 2020 alone,
consumers. The company enters into agreements with restaurants, known as “Partner
(“app”). In addition, some Partner Restaurants also contract with Grubhub for marketing
and delivery services. Grubhub charges Partner Restaurants commissions for appearing on
its platform, as well as for its marketing and delivery services. Consumers who use
Grubhub to place food and beverage orders from Partner Restaurants are charged certain
fees to Grubhub, including a “Delivery fee,” “Service fee,” and, for orders under $10, a
“Small order fee.” Grubhub also offers consumers a subscription-based service called
Grubhub+ for $9.99 per month, which purports to offer certain benefits, such as “unlimited
free delivery.”
number of unfair and deceptive practices with respect to the advertising and promotion of
available for delivery to District of Columbia consumers that in fact had no contractual
relationship with Grubhub, without those restaurants’ consent, and without adequately
disclosing to consumers its lack of relationship with those restaurants. This deceptive
prices, and hours for Non-Partner Restaurants were more likely to be out-of-date or
incorrect, and there was a greater likelihood that orders from those restaurants would take
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longer to fill, would be filled incorrectly, would be delivered cold, or would eventually be
cancelled altogether.
restaurants’ menus, Grubhub’s website and app often contain prices for menu items that
are higher than the prices for the same exact menu items elsewhere, including at the
restaurant and on the restaurant’s own website, without adequately disclosing that fact to
consumers. Because Grubhub already charges consumers several different types of fees for
its services, such as a “Delivery fee” and a “Service fee,” consumers expect that the menu
prices listed on Grubhub are the same prices offered at the restaurant or on the restaurant’s
consumers that the only fee that they would have to pay Grubhub for delivery is a “Delivery
fee,” while deceptively obscuring its “Service fee” and “Small order fee” (if applicable) by
failing to disclose those fees until the end of the ordering process at the checkout page,
after consumers have already invested their time in searching for a restaurant and selecting
menu items that they want to order. Moreover, until recently, even when consumers got to
the checkout page, Grubhub further obscured those fees by combining them in the same
line item as “taxes.” Because only the “Delivery fee” was prominently disclosed at the
beginning of the process, Grubhub led consumers to believe that was the only Grubhub fee
that would be charged. This practice constitutes a digital “dark pattern”—i.e., a design
feature that deceives, coerces, or manipulates consumers into making choices that are either
not what they intended, or not in their best interests—as described in more detail below.
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7. Fourth, Grubhub deceptively advertises to consumers that they can “order
online for free,” even though this promise only applies to pickup orders. Consumers who
place online orders through Grubhub for delivery cannot in fact “order online for free,” as
they are still subjected to Grubhub’s “Service fee,” “Small order fee” (if applicable), and
“Delivery fee.”
Grubhub’s subscription service, Grubhub+, consumers will get “unlimited free delivery”
Grubhub+ do not get unlimited free delivery because they still must pay Grubhub’s
restaurants’ menu pages, and often featuring local area codes, such that consumers would
believe they were the restaurants’ own official phone numbers. In reality, Grubhub tracked
orders placed through these Routing Telephone Numbers and charged its Partner
Restaurants a separate commission for such orders without adequately disclosing that fact
to consumers, thus limiting consumers’ ability to choose to place a telephone order directly
with a local restaurant without the restaurant being subjected to Grubhub’s commissions.
10. Seventh, for hundreds of its Partner Restaurants in the District of Columbia,
Grubhub created websites, known as “microsites,” made to look like the restaurants’ own
official websites—often using the restaurants’ own logos, menus, and photos of actual
menu items—without adequately disclosing to consumers that the sites are made and run
by Grubhub. Consumers who attempt to place orders through these microsites, by clicking
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on the “ORDER NOW” button, are transferred directly to Grubhub to complete their
orders, thus making it seem that Grubhub is the only or preferred method of placing an
online order with the restaurant. Again, this practice limits consumers’ ability to bypass
Grubhub and deal directly with local restaurants without subjecting those restaurants to
unnecessary commissions.
11. Eighth, Grubhub deceptively marketed its “Supper for Support” promotion
to consumers as a way for them to save money, while at the same time supporting local
independent restaurants that had been affected by the decline of business due to the Covid-
19 pandemic. The promotion advertised that consumers who placed orders from 5 p.m. to
9 p.m. each day, during the promotion, with any of Grubhub’s participating Partner
Restaurants would receive $10 off their orders of $30 or more. However, contrary to its
advertisements, this promotion did not actually support restaurants—as the restaurants, not
Grubhub, were required to foot the full cost of the $10 off promotion (with the exception
of a small $250 credit that Grubhub eventually provided restaurants after public backlash),
and those restaurants were further responsible for paying Grubhub commissions on the full
(non-discounted) price of the food total rather than the amount that the customer paid. Yet
again, this practice limited consumers’ ability to bypass Grubhub and deal directly with
12. Each of the above practices are separate violations of the CPPA. These
consumers’ right to truthful information at every step of the process when they use
Grubhub’s services. Accordingly, the District brings this case to permanently enjoin these
deceptive business practices and secure restitution, civil penalties, and other relief.
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JURISDICTION
13. This Court has jurisdiction over the subject matter of this case pursuant to
14. This Court has specific personal jurisdiction over Grubhub pursuant to D.C.
Code § 13-423(a).
PARTIES
15. Plaintiff, the District, a municipal corporation that is authorized to sue and
be sued, is the local government for the territory constituting the seat of the government
for the United States of America. The District brings this action through its chief legal
officer, the Attorney General for the District of Columbia. The Attorney General has
general charge and conduct of all legal business of the District and all suits initiated by and
against the District and is responsible for upholding the public interest. D.C. Code § 1-
consumer protection laws, including the CPPA, pursuant to D.C. Code § 28-3909.
and principal place of business at 111 W. Washington Street, Suite 2100, Chicago, IL,
60602.
17. On June 15, 2021, Grubhub, Inc., together with its subsidiaries, was merged
with and into Checkers Merger Sub II, Inc. pursuant to an acquisition agreement with Just
Eat Takeaway.com N.V. (“Just Eat Takeaway”), a public entity incorporated under the
laws of the Netherlands. In connection with the merger, the name Checkers Merger Sub II,
Inc. was changed to Grubhub, Inc. Pursuant to the merger, the new Grubhub, Inc. entity
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(formerly known as Checkers Merger Sub II, Inc.) is a wholly owned subsidiary of Just Eat
Takeaway and holds all debts, liabilities, and duties of the original Grubhub, Inc. entity.
owned subsidiary of Grubhub, Inc., is a Delaware corporation with its headquarters and
principal place of business at 111 W. Washington Street, Suite 2100, Chicago, IL 60602.
platform connecting consumers with local restaurants for delivery via the Grubhub website
and app. Grubhub works by matching two types of users with one another: (1) consumers
(who pay Grubhub to place delivery orders) and (2) delivery drivers (who Grubhub pays
to deliver these orders). Grubhub also allows its Partner Restaurants, with which it has
contractual relationships, to be listed on its app and website even without using Grubhub’s
delivery service—i.e., for pickup orders or self-delivery orders (where the restaurant uses
20. Grubhub is one of the largest food delivery companies in the District of
providing the company with their name, email address, and mobile phone number.
Alternatively, consumers can sign up via Facebook or Google. Once a consumer is logged
into their account and has provided payment information, such as a credit or debit card,
they can place an order with numerous local restaurants through the Grubhub website or
app.
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B. Grubhub Deceives Consumers About its Lack of Contractual Relationships
with Non-Partner Restaurants Listed on its Platform.
national restaurant chains, are a central feature of the Grubhub platform and one that
consumers have come to expect. The “more than 300,000 restaurant partners in over 4,000
U.S. cities” that Grubhub promises consumers depends on these partnerships. Without the
in fulfilling orders placed through Grubhub, consumers cannot be assured that they are
receiving accurate, up-to-date information about the restaurants’ hours, menu items, and
23. Grubhub has repeatedly emphasized its partnerships with local restaurants
in its marketing to consumers. For example, in a July 12, 2021, press release announcing
its “Grubhub Guarantee,” Grubhub’s CEO, Adam DeWitt, stated, “Restaurants work
incredibly hard to create the best experience for diners, and we are helping to safeguard the
reputations of our restaurant partners through Grubhub Guarantee.” Also, in a June 10,
2021, press release announcing its “We Serve Restaurants” marketing campaign, Grubhub
stated that the new marketing campaign “builds on recent product updates and
partnerships,” and was “created out of Grubhub’s commitment to put restaurants and their
needs first.”
24. Grubhub also promoted its support for its restaurant partners during the
early months of the COVID-19 pandemic. In a July 30, 2020, press release, Grubhub
announced that it spent $85 million to support restaurants by “driving more orders to
restaurants through coupons we funded, reduced diner fees, and increased advertising.”
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25. Grubhub’s preference has been to have more Partner Restaurants listed on
its platform rather than Non-Partner Restaurants, because Partner Restaurants pay lucrative
commissions. However, because restaurants were not signing up as partners with Grubhub
fast enough, Grubhub began exploring adding Non-Partner Restaurants to its platform,
on its platform without having any contractual relationship with those restaurants, and
explained that it more than doubled its restaurant inventory from 140,000 to more than
300,000 nationwide in just three months, noting that “much of this increase is driven by
27. Since October 2019, Grubhub has listed over a thousand Non-Partner
Restaurants located in the District of Columbia metropolitan area on its website and app
restaurants did not have a contractual relationship with Grubhub, or that the restaurants did
some type of business relationship with Grubhub, thereby authorizing such restaurants to
be listed on Grubhub, and that Grubhub was authorized to fulfill the delivery and/or pickup
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29. At no point during the ordering process on its platform did Grubhub
Grubhub did not have a contractual relationship with Grubhub, or that such restaurants did
not consent to be listed on Grubhub’s platform—and thus that the consumer experience
may be negatively affected by that lack of relationship. For example, the menu items,
prices, and hours for Non-Partner restaurants listed on Grubhub may be out-of-date or
orders would take longer to fill, would be filled incorrectly, would be delivered cold, or
30. Despite this material difference in the consumer experience, both Partner
Restaurants and Non-Partner Restaurants were listed on Grubhub in the same manner.
Grubhub did not distinguish how Partner Restaurants and Non-Partner Restaurants
appeared on its platform, nor did Grubhub specify which restaurants were Partner
Restaurants and which were Non-Partner Restaurants. As such, consumers had no way of
knowing just by looking at the restaurant listings on the Grubhub website or app whether
often used the same logos, menus, or photographs of menu items that were found on the
restaurants’ own official websites. Grubhub simply obtained this information from external
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32. Consumers often never learned that the restaurant they placed an order from
on Grubhub was a Non-Partner Restaurant. Often, the only way for a consumer to
determine whether a particular restaurant listed on Grubhub was a Partner Restaurant was
for the consumer to either contact the restaurant directly, or by going to the restaurant’s
official website, which would sometimes list their official third-party delivery partners, if
any, or would redirect the consumer to the third-party delivery partner’s website when the
app had allowed it to significantly increase its revenues, to the detriment of consumers.
C. Grubhub Deceives Consumers Into Paying Prices That Are Often Higher
Than Those Listed by the Restaurant for the Same Exact Menu Items.
34. Through its advertising, Grubhub tells consumers that they can “[f]ind great
meals fast with lots of local menus” on Grubhub, suggesting that its platform accurately
reflects restaurants’ menu items and pricing. In reality, the prices listed for a restaurant’s
menu items on Grubhub’s platform are often higher than the prices for those same exact
menu items on the restaurant’s dine-in menu and on the restaurant’s own website for
delivery and takeout. Depending on the restaurant and the menu item, the difference in
35. For example, Young Chow, an Asian restaurant located at 312 Pennsylvania
Avenue, S.E., Washington, DC 20003, is listed on Grubhub with a variety of soups, salads,
appetizers, sides, entrees, drinks, and desserts for delivery. The prices for its menu items
on Grubhub’s platform are higher than the prices for these same exact items on Young
Chow’s official website, as shown by the screenshots below comparing Grubhub’s version
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Grubhub Young Chow Menu Page - Beginning of Menu Page
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Young Chow’s Official Website Home Page
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Young Chow’s Official Website Menu Page – On the Grill Menu
36. Based on this example alone, Grubhub’s inflated menu prices could cause
a family of four ordering dinner to pay substantially more for the same food if they use
Grubhub’s platform instead of ordering directly from Young Chow’s website, even before
Grubhub’s delivery and service charges are added. For instance, one dinner for four1 from
Young Chow on Grubhub costs $143.45, before taxes and fees. This same family, however,
1
For illustrative purposes, the following mix of salads, soups, appetizers, entrees, and
drinks are used in this paragraph for a typical dinner for four: Bali To Fu, Cold Sesame
Noodles, Wonton Soup, Miso Soup, Thai Crispy Calamari, Fried Pork Wonton, Peking
Duck with Pancake, Chicken with Green Broccoli, Beef with Asparagus, Grilled Chicken
Teriyaki, and four bottled sodas.
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would only pay $120.10, before taxes and fees, if they placed the same order directly with
the restaurant.
37. Grubhub’s inflated menu prices can also inflate the “Service fee” Grubhub
collects on the order. That “Service fee” is usually 5-15% of an order’s subtotal, which is
directly based on the menu items’ subtotal. As a result, consumers pay higher “Service
38. Grubhub uses this deceptive practice across the District of Columbia.
Another example is Good Stuff Eatery, an American restaurant located in Southeast D.C.
The prices for menu items on Grubhub are higher than the prices for these same exact items
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Grubhub’s Good Stuff Eatery Menu Page – Burger Menu
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Good Stuff Eatery’s Official Website Menu Page – Beginning of Menu Page
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Good Stuff Eatery’s Official Website Menu Page – Burger Menu
39. Here again, a family of four placing a dinner order from Grubhub for food
and drinks from Good Stuff Eatery could pay substantially more for the same order, even
before taxes and fees, than if they ordered the same meal directly from the restaurant. Using
one combination of items, the family would spend $130.35 on Grubhub versus $113.36
40. A consumer would not anticipate these inflated prices, particularly given
Grubhub’s representations that consumers can peruse “local menus” on its platform.
Moreover, Grubhub already charges consumers a separate Service fee and Delivery fee to
2
For illustrative purposes, the following mix of salads, burgers, fries, drinks, and desserts
are used in this paragraph for a typical dinner for four: Greek Salad, Good Stuff
Farmhouse Salad, Caesar Salad, Cobb Salad, Steakhouse Burger, Free Range Turkey
Burger, Good Stuff Melt, Big Stuff Bacon Meltdown, four Village Fries, four bottled
sodas, and four Oatmeal Cookies.
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cover its operating costs. Grubhub even charges a separate “Small order fee” of $2 to cover
its costs for handling orders under $10. Consumers would therefore expect that the prices
of the menu items on Grubhub would be the same as the prices for these same exact items
41. Grubhub fails to correct the false expectation it created in any meaningful
way. At no point during the ordering process are consumers sufficiently informed that the
prices for menu items may be higher than the prices offered elsewhere, as there is no such
disclosure on either the restaurant’s menu page or any of the checkout pages. Instead, this
webpage that consumers are unlikely to ever see—as it is entirely separate from the menu
webpage or the checkout screen flow, and can be reached only if a consumer scrolls past
dozens of restaurant listings to the bottom of the Grubhub website or app, or past all the
menu items on a particular restaurant’s webpage, and then clicks on the “Terms of Use”
button. And even this inadequate disclosure was not included in Grubhub’s Terms of Use
until December 14, 2021. Prior to then, from January 2020 to December 2021, the Terms
of Use included only the vague and uninformative statement that Grubhub “reserves the
right to consolidate or otherwise incorporate fees and/or surcharges into the prices listed
disclosing this fact to consumers allows Grubhub to significantly increase its revenues
through, for example, higher “Service fees,” and it also deprives consumers the ability to
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D. Grubhub Misrepresents That its Delivery Fee is the Only Fee Consumers
Pay for Using Grubhub, and Deceptively Obscures its Other Fees by
Combining Such Fees with Taxes on its Checkout Pages.
43. When consumers first initiate a search for a restaurant on Grubhub, they are
presented with a list of restaurants in their area that are available for delivery. Each listed
restaurant contains its name, rating, approximate time for delivery, and the amount of
Grubhub’s “Delivery fee,” if applicable. No other fees are listed, even though Grubhub
later adds a “Service fee” and, in some instances, a “Small order fee.” An example of a
represents to consumers that this is the only additional fee that they will have to pay if they
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45. Even when consumers select a restaurant, they are not informed of any other
fees at this stage. Instead, they are presented with the restaurant’s contact information,
estimated delivery time, and the full menu. An example of a restaurant’s menu page on
46. Grubhub certainly has space on its menu page (e.g., to the right of the
delivery information) to provide consumers with specific information about the full range
of fees, such as the percentage of its “Service fee” and what the threshold is necessary to
purchase to avoid the “Small order fee,” or even a general disclaimer that additional fees
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47. It is not until after consumers have selected a restaurant, chosen menu items,
and clicked on the “Proceed to Checkout” button, that they are presented any information
48. Until recently, once consumers arrived at the checkout page, they were
presented with key information about their order, including a summary of the selected
menu items and their prices, as well as an itemized list of charges, such as the items
subtotal, the “Delivery fee,” and the “Tax and fees,” as is shown by the screenshot below:
49. The “Tax and fees” line item was listed as a single amount that combined
taxes with certain fees charged by Grubhub, such as a “Service fee” and a “Small order
fee,” if applicable. Only by clicking on the small circle with an “i” inside, which is located
to the right of the listing for the “Tax and fees,” would a consumer then be presented with
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a pop-up box that had an itemized listing of the fees and estimated tax. In the example
below, featuring an order from Five Guys, a restaurant located at 808 H Street, N.W.,
Washington, DC 20001, that click brought up a pop-up box that revealed a “Small order
50. Sometime in early 2022, Grubhub started listing its “Service fee” as a
separate line-item on the checkout page for certain large orders over $10, as shown by the
screenshot below:
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51. However, even after Grubhub implemented this change, it continues to
obscure its “Service fee” and “Small order fee” for orders under $10. Although these fees
are no longer combined with taxes, they have simply been moved to another line-item
charge ambiguously called “Other fees.” As with the previous iteration under “Tax and
fees,” consumers still must click on the small circle with an “i” inside next to “Other fees”
to reveal what these other fees represent, as shown by the screenshot below:
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52. In short, Grubhub lures consumers into the ordering process with an
artificially low “Delivery fee”—the “bait” in Gruhbub’s bait-and-switch scheme. But that
fee is false, and Grubhub never intends to charge only that amount for delivery. Grubhub
waits until the end of the ordering process to disclose that the consumer will in fact be
charged additional fees for delivery—namely, the “Service fee” and, if applicable, the
“Small order fee.” Grubhub therefore misrepresents the “Delivery fee” as the entire charge
for delivery, when it is merely the first in a series of charges the consumer may be required
53. This practice is also deceptive because a consumer would expect that all
applicable Grubhub fees—not just the “Delivery fee”—would be disclosed at the outset of
the order, before the consumer has taken the time and effort to make restaurant and menu
selections. Moreover, at the end of the ordering process, a consumer would have expected
taxes to be listed separately from Grubhub’s fees, as they were separate types of charges.
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This is especially the case because Grubhub already has listed and continues to list its
itemized charges for taxes and fees (and now “Other fees”), this information was only made
available to consumers if they took the extra step of clicking on the small circle with the
“i” inside of it. This circle is not obvious to consumers, as it is small and not in a contrasting
54. Grubhub’s practice of failing to disclose its fees until late in the ordering
process—after consumers have invested time and effort—and even then, failing to clearly
disclose certain fees by obscuring them with taxes, or in a category called “Other fees,” is
otherwise known as a digital “dark pattern.” This term has been used by the Federal Trade
websites and mobile apps that deceive, coerce, or manipulate users. Grubhub’s practice of
waiting until the final stage step of the checkout flow to disclose the “Service fee”
represents a type of dark pattern known as “hidden costs,” in which additional costs or fees
are introduced at the end of the checkout process. Moreover, Grubhub’s previous practice
of bundling the “Service fee” with taxes, and its current practice of bundling the “Service
fee” with “Other fees” for orders under $10, represents a type of dark pattern known as
55. Grubhub’s use of dark patterns has benefited the company through the
collection of inadequately disclosed fees and has deprived consumers of the ability to make
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E. Grubhub Misrepresents to Consumers that Online Ordering is Free.
56. Grubhub advertises throughout its website that consumers can find
restaurants in the District of Columbia where they can “order online for free.” For example,
when conducting a search in Google for “Grubhub DC,” clicking on the link for the
Grubhub website, which is one of the search results, reveals the following landing page, as
57. Grubhub makes this same deceptive statement when consumers click on any
of the different cuisines listed under “Top Cuisines” on the initial landing page, such as
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58. Grubhub also makes this same deceptive statement on its webpages tailored
to a specific zip code, such as “20001” in the District of Columbia, as is shown by the
screenshot below:
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59. Grubhub includes the same deceptive language next to search boxes to
search for specific restaurants offering delivery through Grubhub, as is shown by the
screenshot below:
60. By including the “order online for free” statement above a search box that
will answer the question of “Who delivers to you?”, Grubhub misleads consumers into
believing that ordering delivery through the Grubhub website is free, when that is not the
case.
restaurants near them, the “order online for free” statement is located just above a search
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62. Nowhere in any of its advertisements where the “order online for free”
statement is used does Grubhub disclose to consumers that they will be subject to certain
63. Indeed, in one of Grubhub’s questions and answers in its FAQ section on
its homepage, Grubhub provides a detailed answer to the question of how much it costs to
64. Even for the subset of consumers who happen to navigate to and read this
FAQ, those consumers would likely conclude that if they placed a delivery order through
the Grubhub website that there would not be any fees charged by Grubhub, and that the
only fee that may apply would be a separate delivery fee charged by the restaurant. Like
its “order online for free” advertisements, Grubhub fails to disclose to consumers in its
FAQ section that delivery orders are subject to an additional “Service fee” and “Small order
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fee.” As discussed in Section D, supra, Grubhub does not disclose these fees to consumers
65. Although consumers can order online for free on the Grubhub website if
they use pickup instead of delivery, this simple fact is not clearly disclosed. Instead,
Grubhub fails to differentiate between pickup and delivery orders in its advertising to
consumers that they can “order online for free.” Moreover, the option of “delivery” is
already preselected on the Grubhub website by default when a consumer initiates a search.
66. In addition to its regular food delivery service, Grubhub offers consumers a
United States, including in Washington, DC, at a current charge of $9.99 per month (plus
applicable tax).
at your favorite restaurants on eligible orders.” Grubhub promotes Grubhub+ on both its
website and app. The following is an example of one of these promotions, as shown by the
screenshot below:
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68. Grubhub touts that Grubhub+ subscribers are not charged “Delivery fees”
on orders over $12 that are placed with eligible restaurants. However, subscribers who
place delivery orders fulfilled by Grubhub’s drivers are still charged “Service fees” for
those deliveries.
to consumers that they are still subject to “Service fees” for delivery orders if they enroll
in Grubhub+. Indeed, Grubhub mentions “free delivery” at several points at the top and
middle of the webpage promoting Grubhub+, including representations next to a large blue
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70. Only by scrolling to the very bottom of this webpage are consumers
presented with an inconspicuous disclaimer in fine print stating, among other things, that:
“Additional fees (including, a service fee) may apply and vary on orders.” Because this
disclaimer is far removed from the large blue button at the top of the webpage, which
encourages consumers to try Grubhub+ for free, consumers are unlikely to see (and even
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less likely to read) this disclaimer. Moreover, even for consumers who do read the
disclaimer, Grubhub’s use of the word “may” suggests that there are instances where
Grubhub+ subscribers would not be subject to a “Service fee” for delivery. That suggestion
is misleading because “Service fees” are always charged when delivery is performed by
71. When consumers click on one of the large blue buttons to “Try it free,” they
are presented with a new webpage where they can enter their payment information and
72. Although there is a disclaimer in fine print at the bottom left-hand side of
the webpage, this disclaimer does not mention the “Service fee” at all. Instead, it provides
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73. Only by clicking on the link in the disclaimer for “Membership Terms” are
consumers presented with a new webpage that contains the full “Membership Terms of
Use.” The “Membership Terms of Use” for Grubhub+ is a lengthy document that most
consumers are unlikely to find, let alone read. However, even if a consumer were to find
and read the document, the relevant language about “Service fees” is located about a
quarter of the way down, past legal language that most consumers would find hard to
comprehend. Indeed, the language about “Service fees” is complex and confusing, stating
that “Unless otherwise expressly stated in a Membership Offer, other fees, including small
order fees, driver benefits fees, and service fees, may apply and vary, and will not be
the word “may” remains misleading because a “Service fee” is always charged when
placing an order for delivery using Gruhbub’s third-party delivery drivers, even with
Grubhub+.
74. After enrolling in Grubhub+, a subscriber placing a delivery order does not
actually see the “Service fee” until checkout, similar to a consumer using the non-
deceptive, as a consumer would expect that all applicable Grubhub fees—not just the
“Delivery fee”—would be disclosed at the outset of the order, before the consumer has
taken the time and effort to make restaurant and menu selections.
delivery,” while failing to disclose its “Service fee” until late in the ordering process—after
consumers have invested time and effort—and even then, obscuring it with other taxes or
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fees, has benefited Grubhub through its enrollment of consumers into a subscription-based
service and has deprived consumers of the ability to make informed purchasing decisions.
G. Grubhub Uses Deceptive Phone Numbers on Its Website and App in Order
to Collect Extra Commissions.
76. From January 2016 until August 23, 2021, Grubhub generated its own
presenting those phone numbers to the public as if they were the restaurants’ own direct
numbers, while secretly taking commissions from orders placed through calls made to
those numbers.
telephone systems companies, then generated and assigned them to Grubhub’s Partner
Restaurants that either chose to facilitate their own delivery (i.e., self-delivery Partner
Restaurants) or that did not provide delivery to diners (i.e., pickup only Partner
Restaurants). Grubhub then listed the Routing Telephone Numbers, which often featured
local area codes to suggest to consumers that they reflected the restaurants’ direct phone
numbers, on the Grubhub platform’s menu pages for the Partner Restaurants.
78. On the Grubhub platform, the Routing Telephone Numbers appeared in two
separate places. The first was near the top of the webpage, under the restaurant’s name next
to the address. The second was near the bottom of the webpage, under the restaurant’s
app and website that the Routing Telephone Numbers were controlled by Grubhub and that
Grubhub took commissions from Partner Restaurants for orders placed through those
numbers. This also was not disclosed when consumers called the numbers. Although an
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automated message typically was played at the beginning of those calls—for example, to
inform the consumer that the call would be recorded—the vast majority of those messages
did not mention Grubhub, and none of them disclosed the fact that Grubhub would charge
telephone order directly with a local restaurant so that the restaurant would not be subjected
to Grubhub’s commissions.
80. Grubhub charged Partner Restaurants a commission for each order that a
of its average sale. Grubhub did not directly monitor calls placed through Routing
determine the likelihood that a particular call was an order, rather than for some other
purpose, such as inquiring about the restaurant’s hours. It then used that algorithm to
about August 23, 2021, by using customer service agents to take orders from consumers
who call restaurants’ Routing Telephone Numbers. Unlike the recordings played prior to
this date, the customer service agents now inform consumers that they are placing their
orders through Grubhub. Grubhub also recently added a small circle with an “i” next to its
Routing Telephone Numbers that, when clicked, reveals some information about “Order
Assistance,” and that Grubhub’s terms of use and privacy policy apply.
82. However, prior to August 23, 2021, Grubhub engaged in deceptive practices
by listing Telephone Routing Numbers in a manner that suggested to consumers that they
were the restaurants’ direct phone numbers, such that no third party would be charging the
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restaurant a commission for orders placed through those numbers. Yet again, Grubhub
created a false impression and failed to correct it, thus diminishing consumers’ information
83. From 2011 through 2018, Grubhub created, and registered domains for,
These microsites were made to look like the restaurants’ official websites, containing the
restaurant’s name, street address, and often its official logo and pictures of actual menu
items. However, Grubhub used these websites to funnel consumers to Grubhub, with
February 2022.
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86. Although Grubhub’s microsites contain “Reviews from Grubhub,” the fact
that such reviews are listed under the heading “Our reviews,” and are reviews about the
restaurant, suggests that the website is the restaurant’s, not Grubhub’s, as is shown by the
screenshot below:
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87. In fact, just below the reviews is a section labeled “About us,” which again
lists the restaurant’s street address, as well as a phone number, operating hours, the type of
cuisine, and a lengthy description of the restaurant that is written in the first person.
Combined, all these features foster the impression that it is the restaurant’s official website,
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88. Indeed, a consumer must scroll down to the bottom of the microsite
webpage to find further references to Grubhub, which are in the form of a nondescript
copyright notice and an obscure statement that the restaurant is “A leading Washington
restaurant on Grubhub.” However, most consumers are unlikely to see these references
because they are at the bottom of the webpage and are not conspicuous, as is shown by the
screenshot below:
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89. When a consumer clicks on the “ORDER NOW” button on the microsite,
the consumer is redirected to the restaurant’s Grubhub menu page to complete the order.
Because it is not uncommon for a restaurant to have links on its official website to various
preferred third-party delivery websites, the fact that Grubhub’s microsites redirect
consumers who click on the “ORDER NOW” button to Grubhub would not necessarily
90. After an order that is initiated through a microsite is placed on Grubhub, the
company can charge the Partner Restaurant a marketing commission, which is in addition
to the commission it receives for listing the restaurant on its platform. Although the amount
of commission charged for orders placed through microsites has varied over time, Grubhub
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91. This practice by Grubhub of using microsites is simply a way to deceive
consumers into ordering from a Grubhub-controlled website, where Grubhub can collect
an added commission, instead of from the restaurant’s own official website, which is not
subject to a commission. This impacts consumers’ ability to make informed decisions about
where and how to order from, and support, their local restaurants.
92. On March 27, 2020, Grubhub launched a new promotion throughout the
United States, including in the District of Columbia, called “Supper for Support.” Grubhub
told consumers that they could save money while at the same time supporting local
93. Pursuant to this promotion, Grubhub told consumers the following: “Every
day, from 5:00pm – 9:00pm, get $10 off your order of $30+ with Grubhub. So you can
save while supporting the restaurants you love.” An example of one of Grubhub’s
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94. Grubhub extensively promoted its Supper for Support promotion in March
and April 2020 via social media, including Instagram, Facebook, Twitter, and YouTube,
screenshots below:
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Still Frames from Grubhub’s Supper for Support Commercial
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95. Partner Restaurants that agreed to participate in Supper for Support were
faced with two costly contractual requirements with respect to the promotion. First,
restaurants were required to fund the full cost of the $10 off promotion for each order.
Second, restaurants were required to pay Grubhub its marketing and delivery commissions
based on the higher non-discounted product total rather than the lower amount the customer
paid.
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96. Grubhub did not disclose to consumers in its advertisements for Supper for
Support that participating Partner Restaurants were required to shoulder the entire cost of
the $10 off promotion or that restaurants had to pay Grubhub its commissions on the full
97. Such costs significantly cut into the gross revenue on each Supper for
Support order. The following chart of a hypothetical $30 order shows the difference in
gross revenue between a restaurant participating in Supper for Support and a non-
participating restaurant.
combined 30% marketing and delivery commission during the time the Supper for Support
promotion was in effect. Therefore, based on the Terms and Conditions of Supper for
funding the full cost of the promotion and paying commissions on the non-discounted
product total, a restaurant not participating in the promotion would keep $21 in gross
revenue on a $30 order, while a restaurant participating in the promotion would only keep
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99. In late March 2020, Grubhub touted how Supper for Support was helping
boost sales for restaurants, when it claimed that “local restaurants that chose to participate
in the optional initiative have, on average, seen a more than 20 percent increase in the
number of orders they have received as well as overall sales.” However, even assuming a
20% increase in the number of orders, many restaurants that participated in Supper for
Support would still end up doing worse than if they did not participate. For example,
without Supper for Support, a restaurant would see gross revenue of $315 on fifteen $30
orders. With Supper for Support, assuming a 20% increase in orders, that same restaurant
would see gross revenue of $198 on eighteen $30 orders. Thus, this restaurant would make
$117 more in gross revenue by not participating in Supper for Support than if they did
100. Several days after Supper for Support first launched, a number of
publications such as Eater, The Verge, and PYMNTS.com began criticizing Grubhub in
news articles over its Supper for Support promotion, with headlines such as “Grubhub Asks
Restaurants to Foot the Bill on ‘Supper for Support’ Promotions,” “Grubhub’s $10 Off
Promo Forces Restaurants to Front the Discount Costs While Being Charged Full
Commission,” and “Restaurants Cry Foul as Grubhub Makes Them Eat a $10 Off Deal,”
respectively.
restaurants a credit of up to $250 to cover the $10 discount on the first 25 orders made
under this promotion, in what Grubhub dubbed internally as “Supper for Support 2.0.”
after the $250 credit was exhausted, they would have to again cover the full cost of the $10
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discount. Moreover, according to the Terms and Conditions of the Supper for Support
contract, participating restaurants were required to honor up to 100 redemptions of the $10
including its statements that Grubhub “created Supper for Support to help out” restaurants,
and that the promotion would “help save the restaurants we love,” were likely to believe
that restaurants were in fact benefitting from this program, and that the costs were being
103. In the District of Columbia alone, consumers redeemed over 10,000 Supper
additional revenue through Supper for Support, while deceptively advertising to consumers
Count I
(Violations of the Consumer Protection Procedures Act)
goods and services that are or would be purchased, leased, or received in the District of
Columbia.
106. The services that Defendants provide consumers are for personal,
household, or family purposes and, therefore, are consumer goods and services.
107. Defendants, in the ordinary course of business, supply consumer goods and
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108. Users of Defendants’ services receive consumer goods and services in the
form of food delivery services from Defendants or their agents and are therefore consumers
109. The CPPA prohibits unfair or deceptive trade practices in connection with
their services, have engaged in a course of trade or commerce which constitutes false,
deceptive, or misleading acts or practices, and is therefore unfair or deceptive under the
CPPA, including:
§ 28-3904(e):
Restaurants that have been listed on Grubhub, and that they are
website menus;
3. That the “Delivery fee” is the only fee that they will have to pay
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4. That the Grubhub+ service provides subscribers “free delivery,”
2. That the prices of certain menu items on Grubhub are higher than the
prices for the same exact items elsewhere, including at the restaurant and
3. Certain fees, such as “Service fees” and “Small order fees,” that
4. That consumers can order online for free only with respect to pickup
orders;
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5. That Grubhub+ subscribers must pay Grubhub a “Service fee” to obtain
connection to such numbers, and that orders placed through these phone
that orders placed through these websites will cause restaurants to pay
for the full cost of the $10 discount for each redeemed coupon, and that
ambiguities as to material facts that have the tendency to mislead and are
1):
listed on Grubhub;
2. That the prices of certain menu items on Grubhub are higher than
the prices for the same exact items elsewhere, including at the restaurant
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3. That certain fees that Grubhub charges consumers, such as
“Service fees” and “Small order fees,” are separate from taxes;
pickup orders;
by Defendants, and that orders placed through these phone numbers will
to Defendants; and
more than some of its Partner Restaurants, and that some Partner
advertising a “Delivery fee” for Grubhub’s delivery services that does not
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(a) Permanently enjoin Defendants, their agents, employees, and all other
Grubhub’s platform;
(b) Award such relief as the Court finds necessary to redress injury
(c) Order the payment of statutory civil penalties pursuant to D.C. Code
(d) Award the District the costs of this action and reasonable attorney’s fees
(e) Grant such further relief as the Court deems just and proper.
Jury Demand
Respectfully submitted,
KATHLEEN KONOPKA
Deputy Attorney General
Public Advocacy Division
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JIMMY ROCK
Assistant Deputy Attorney General
Public Advocacy Division
BENJAMIN WISEMAN
Director, Office of Consumer Protection
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