A group of law firms has filed a lawsuit over deceptive online ordering practices within the restaurant industry. They claim that Google has interfered with the restaurant industry’s relationship with its customers by providing online ordering without permission.
The lawsuit argues that customers rarely remember a restaurant’s website, phone number or address and use Google’s search engine to obtain that information. Before 2019, the results were displayed on the screen. Google earned revenue from advertising that was generated at the top of the screen based on the search query. Since 2019, according to the lawsuit, Google has made restaurant queries transactional. Searches display delivery options for third-party delivery and keep the users away from the company’s website. As a result, Google is trying “to trade-off of the goodwill, reputations, and tradenames of thousands of restaurants throughout the United States for its benefit and the restaurants’ detriment.”
The lawsuit continued, “But Google’s newest business models were not, and are not, lawful. First, Google never bothered to obtain permission from the restaurants to sell their products online, and the Delivery Providers to whom Google passed orders were not (and are not) permitted, by contract, to license Google’s conduct.”
The lawsuit argues that the practice is “bait-and-switch” because Google adds an “Order Online” button below a restaurant’s name and logo. Customers are led to believe the order is being processed by the restaurant, but the button is owned and controlled by Google. That is not the case when third-party delivery is used. Once the order is placed, restaurants are charged a fee for using the third-party delivery services.
“The restaurant industry has already been gutted by the COVID-19 pandemic,” said Jason A. Zweig, a partner at Keller Lenkner, one of the firms that filed the lawsuit. “Online orders have served as a lifeline to help them reach customers, make a slim profit, and continue employing their staff members. It is appalling that Google would take advantage of an industry going through such a challenging time and, through these deceptive and illegal practices, take a portion of their hard-earned profits for itself.”
While multiple lawsuits have been filed against the third-party delivery companies for listing restaurants without their permission, this is one of the first aimed at Google. The restaurant industry is not the first to go after Google for similar practices, however. The hotel industry has filed multiple lawsuits against Google over claims of deceptive practices.
The lawsuit was filed on behalf of six Lime Fresh franchises in Florida and seeks to add other restaurants to gain class-action status. A website is set up for owners to register and potentially join the suit. Google, for its part, said it has done nothing wrong because it makes no revenue on the transactions. It is just displaying information.
“Our goal is to connect customers with restaurants they want to order food from and make it easier for them to do it through the ‘Order Online’ button,” a Google spokesperson said. “We provide tools for merchants to indicate whether they support online orders or prefer a specific provider, including their own ordering website. We do not receive any compensation for orders or integrations with this feature. We dispute the mischaracterizations of our product and will defend ourselves vigorously.”
The complaint seeks to have Google stop the practices and asks for unspecified damages.
“Restaurants need to make a profit to stay in business, but Google’s deceptive webpages divert orders and customers away from the restaurants and into a process that benefits Google, but not the restaurants,” said Tim Sperling of Sperling & Slater, another legal firm that involved in the case.
Many restaurants have added Google online ordering, but the process can be expensive. Thus, the process can be cost-prohibitive for many small restaurant operations.