Grubhub Falsely States Non-Partner Restaurants Are ‘Closed’ During COVID-19 Crisis, Class Action Claims

New to ClassAction.org? Read our Newswire Disclaimer

Grubhub, Inc. has falsely advertised on its delivery platform that non-partner restaurants are closed or not accepting online orders while redirecting customers to its partner eateries, according to a proposed class action.

Filed by a Denver bar and restaurant, the 17-page suit out of Colorado alleges Grubhub’s conduct has robbed non-partner restaurants of paying customers in the midst of the COVID-19 crisis, when many eateries are struggling to stay afloat financially while operating only through takeout and delivery.

Described as “one of the largest meal delivery services in the United States,” Grubhub has designed landing pages on its delivery platform for most major cities’ restaurants, including those with whom it does not do business, the suit explains. According to the case, Grubhub intentionally constructs the meta data of each landing page to boost its place in Google search results, which causes the Grubhub page to often take priority over the restaurant’s own webpage.

The lawsuit says that if a potential customer clicks on the Grubhub link for a restaurant that has not partnered with the delivery platform, they are directed to a landing page where the defendant states, “This restaurant is not taking online orders. Try a similar restaurant nearby.” The customer is then steered toward a different restaurant on Grubhub’s platform that will produce revenue for the company, the case alleges.

Similarly, the suit continues, if a customer clicks a Grubhub link using a mobile device on which the defendant’s app is installed, the app will automatically open and display that the non-partner restaurant is “closed.”

The plaintiff bar and restaurant claims that such advertising on Grubhub’s platform is simply not true.

“In reality, [the plaintiff restaurant] is not only open, but also delivering its food to its customers using a different delivery platform,” the suit says. “[The restaurant] does not work with Grubhub and does not plan on contracting with their delivery or online ordering services.”

The plaintiff stresses that during the COVID-19 crisis, delivery orders are the only way the eatery can generate revenue and stay in business. According to the suit, Grubhub never contacted the plaintiff to determine whether it was open for business.

The lawsuit claims Grubhub intentionally advertises that restaurants who haven’t partnered with the platform are closed or not taking orders “even though that is completely false.” In doing so, the case alleges, the defendant benefits economically by directing potential customers to restaurants that use Grubhub’s delivery service and therefore generate revenue for the company. According to the suit, the defendant’s conduct has “directly harmed” restaurants that choose to offer their own delivery service or partner with one of Grubhub’s competitors.

The full complaint can be read below.

ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.

 Sign up for ClassAction.org’s newsletter here.