Grubhub has agreed to pay restaurants $3.5 million to settle a lawsuit by the Massachusetts attorney general that it overcharged for delivery services during the pandemic.
The third-party delivery service has also agreed to pay Massachusetts $125,000 to settle the lawsuit.
The state’s attorney general’s office sued Grubhub in 2021. It argued that the third-party delivery service charged restaurants service fees equal to 18% of the amount of a bill or more during the pandemic.
That violated legislation capping those charges at 15%. The cap was in place between Jan. 14, 2021 and June 15, 2021, when the state of emergency was lifted.
In March of last year, a Suffolk County Superior Court judge ruled in favor of the Commonwealth, saying that Grubhub’s conduct violated the fee cap and the state’s consumer protection statute.
Restaurants impacted by the overcharges will be contacted regarding the settlement. “Grubhub unlawfully overcharged and took advantage of restaurants during a public health emergency that devastated much of this industry,” Massachusetts Attorney General Andrea Joy Campbell said in a statement.
Several states instituted fee caps on delivery services during the pandemic, arguing that restaurants could not afford to pay high charges at a time when the service was one of the few available to restaurant customers.
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