FTC Begins Distributing $23.8 Million in Grubhub Settlement Payments
The Federal Trade Commission announced on August 12, 2026 that it is sending more than $23.8 million to 640,038 consumers affected by Grubhub's deceptive advertising and other unlawful practices. Most recipients will get a check in the mail; some will receive payments through PayPal (FTC).
The payouts trace back to a lawsuit the FTC and the Illinois Attorney General filed against Grubhub in December 2024. Grubhub agreed to pay a suspended judgment of $25 million to settle the case. The $23.8 million now going out is the portion earmarked for consumer refunds (TechCrunch).
The FTC's complaint described a wide range of misleading behavior. Grubhub deceived diners about delivery costs and locked customers out of their accounts and the money held in them (CNBC). The complaint also accused the company of overstating how much drivers could earn.
One of the more notable allegations involved restaurant listings. The FTC said Grubhub had listed as many as 325,000 restaurants on its platform that had no relationship with the company, making the platform look far larger than it actually was. When restaurants asked to be removed, Grubhub sometimes refused and instead tried to recruit them into paid partnerships (TechCrunch).
The settlement requires several changes to how Grubhub operates. The company must advertise potential driver earnings more accurately, give customers a way to challenge account restrictions that block access to their funds, and get a restaurant's permission before listing it. Grubhub also agreed to make its platform clearer about costs for diners (Grubhub).
The FTC distribution follows a separate but related legal milestone. One month before the August 12 announcement, a federal judge granted final approval of a nearly $25 million settlement covering roughly 60,000 Grubhub delivery drivers in California (TechCrunch).
Taken together, the two settlements mean Grubhub has faced about $50 million in financial consequences across federal and state actions in under two years, touching both sides of its marketplace — the people who order food and the people who deliver it. The refund process now underway reaches over 640,000 individuals.
The broader context here matters for anyone operating a platform that connects buyers and sellers. The requirement to obtain affirmative consent before listing a business addresses a practice that has been debated across food delivery and local search platforms for years. The 325,000 unaffiliated listings the FTC cited create a trust problem: if a restaurant never agreed to be listed, every search result, order, and review built on top of that listing rests on a false foundation. For an industry that has invested heavily in growth and scale, the settlement establishes that padded inventory counts built without partner consent carry legal liability, not just reputational risk.
The account-restriction remedy deserves similar attention. Mandating a challenge mechanism for account lockouts that cut people off from their funds addresses a complaint that gig-economy users have raised across multiple platforms. Whether Grubhub's approach becomes a model or simply a baseline requirement is an open question, but the precedent signals that regulators view the combination of account suspension and fund withholding as an enforcement priority.
For the 640,038 recipients, the practical outcome is simple: a check or PayPal payment arriving in the coming weeks. For platform operators and compliance teams, the settlement terms lay out a concrete set of practices the FTC considers actionable under existing consumer protection authority.
