BOSTON — Online food ordering and delivery platform Grubhub will pay more than $3.5 million to settle allegations that it illegally overcharged Massachusetts restaurants during the COVID-19 pandemic, the state Attorney General’s office announced.
The settlement resolves a 2021 lawsuit that accused Grubhub of violating a law that capped the fees third-party delivery services could charge restaurants at 15% of an order’s menu price during the public health emergency. The attorney general’s office accused Grubhub of charging a 15% fee and then adding another 3% fee for “collecting payments, fraud monitoring, customer care.”
At the time the lawsuit was filed, Gov. Maura Healey was the attorney general. In March 2023, the Suffolk Superior Court ruled that Grubhub had violated the statute.
Current Attorney General Andrea Campbell announced the settlement on Friday.
“Grubhub unlawfully overcharged and took advantage of restaurants during a public health emergency that devastated much of this industry,” Campbell said in a statement. “I am proud of my office’s dedicated work in securing meaningful financial relief for impacted businesses and we will continue to protect both consumers and businesses from such unfair and illegal practices.”
Campbell said her office would be contacting impacted restaurants regarding the distribution of the $3.5 million in settlement money.
John Schall, owner of El Jefe Taqueria in Harvard Square, was the first to complain to the state about Grubhub’s fees. In a statement Friday, he thanked the AG’s office.
“The $3.5 million that is coming from this settlement will provide real relief to El Jefe’s and to restaurants across the Commonwealth who were overcharged by Grubhub,” he said.
Grubhub will also pay $125,000 to the state as a part of the deal.
Restaurants with questions may contact the Attorney General’s Insurance and Financial Services hotline at 888-830-6277.