Moburst

Class Action filed against Google for deceptive online ordering practices harming restaurant owners

David Murphy

US law firm Keller Lenkner LLC, together with co-counsel Sperling & Slater PC and Hausfeld LLP, has filed a putative class action on behalf of a class of restaurants alleging that Google LLC (Google) infringed their intellectual property rights and interfered with their customer relationships through the use of deceptive online ordering practices. This is the first lawsuit of its kind filed against the tech giant.

The complaint alleges that Google is deliberately misleading consumers by using the tradenames and reputations of the restaurant class members without their permission.

The plaintiffs claim that when a consumer wants to order food and uses Google to search for a restaurant, Google directs the consumer to an unauthorized digital “storefront” or pop-up webpage owned and controlled by Google.

The complaint alleges that Google purposefully designed these pages – including, prominently featuring the restaurants’ tradenames at the top – to deceive consumers into believing they are on a website operated by the restaurant. Google uses these pages to capture food orders it subsequently sells to delivery platforms such as Postmates, DoorDash, and Grubhub.

According to the complaint, Google did not obtain the restaurant class members’ approval to launch or operate its storefronts or use the restaurants’ tradenames. The restaurants are robbed of valuable direct customer relationships and forced to incur substantial fees paid to delivery platforms (as much as 30 per cent) for each order that Google routes to a delivery provider. A portion of that fee is paid to Google. Had consumers placed orders with the restaurants directly, the restaurants would have avoided or reduced the delivery platforms’ fees.

A number of restaurant chains are thought to be involved in the claim, though the release outlining the details only references one, a Florida-based franchisee of six ‘Lime Fresh Mexican Grill’ restaurants.

“The restaurant industry has already been gutted by the COVID-19 pandemic,” said Keller Lenkner Partner, Jason A. Zweig. “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.”

The complaint further alleges that while certain delivery providers are licensed to sell the restaurants’ food items within their own websites and mobile applications, the agreements do not authorize Google’s websites.

“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.

The complaint alleges Google is in violation of the Lanham (Trademark) Act and seeks actual and enhanced damages from Google, as well as injunctive relief prohibiting Google from using the restaurant class members’ tradenames in connection with its online ordering offerings and requiring Google to take appropriate steps to undo and prevent consumer confusion.

The action is Left Field Holdings LLC, et al. v. Google LLC, No. 3:22-cv-01462, and is filed in United States District Court for the Northern District of California. The lawyers are inviting other restaurant owners who would like to join the proposed class action or learn more about the suit, to contact the attorney team here