legal GrubHub is buying web domains for the restaurants it lists

[EZPZYO]

Link... READ MORE

 

[branding]

"we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it."

Sure, sounds legit to me

 

[jberryhill]

In all probability, the contract that the restaurant signs with Grubhub expressly grants Grubhub a license in the restaurant’s mark that is broad enough to do that.

Grubhub’s response mentions their contract, and it is unlikely that they wouldn’t have provided themselves the right to do it in the contract.

 

[EZPZYO]

Start from 2 Mins

 

[TCK]

According to the referenced article, Grubhub official statement is:

"Grubhub has never cybersquatted, which is identified by ICANN as 'generally bad faith registration of another person's trademark in a domain name.' As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it."

I can't think of any mom-and-pop restaurant that would register a trademark, unless they are planning to go corporate with a national chain. So that statement is ridiculous.

 

[TCK]

Did they tell the restaurants that they were doing this?

I wonder if they have opened up for a huge lawsuit or 3.

Not so, according to the original story. But if the restaurants found out and asked for those domains then Grubhub would transfer them for free. Grubhub did not disclose that to their clients prior to registering the domains.

This was such a dumb idea. I don’t know if Grubhub leadership got bad advice from their IT head or ad agency, or it was all theirs.

 

[TCK]

Just to give you a comparison. I run a Web development biz and have a client that uses a ccTLD domain. When I found out that a .net became available of their exact name, I let the client know so they could acquire it. The client declined but said if I wanted to, it would be fine by them. I responded that as policy we don’t register domains that include our clients’ business names, and/or are trademarks.

I knew that sooner or later, if we develop that name or sell it to a competitor, it would result in bad blood.

It is beyond me that a company the size and with the number of clients as Grubhub couldn’t see that logic. It comes down to pure greed.

 

[offthehandle]

This is sleazy. If the ranking provides a lead, a 30% commission based on their customers brand/domain name registration, the restaurant owners ignorance of SEO or brand protection and the non restaurant phone number and imposter website tricks customers.

https://newfoodeconomy.org/grubhub-domain-purchases-thousands-shadow-sites/

Pro Bono Legal services offered to restaurant owners.
https://mobile.twitter.com/i/web/status/1145082115077414914

“So egregious and such a scam. My law firm will provide pro bono representation to any restaurant affected that wants to reclaim their #domains. Do spread the word, we’re serious about helping.”

https://www.theverge.com/2019/6/28/...-fake-restaurant-domain-names-commission-fees

“Grubhub is using thousands of fake websites to upcharge commission fees from real businesses
They also list phone numbers that don’t belong to the actual business”


https://fourweekmba.com/grubhub-business-model/
Business model. NYSE listed.

 

[jberryhill]

I dont see anything detailed in writing about what if any marketing services including domain name registration is in the GH Restaurant agreement.

Well, then you aren't looking. First off, there is also a "services form" that is incorporated into the agreement. But looking at the agreement you posted here:

-----
e. GH owns all right, title, and interest in and to the GH System and any content supplied by GH, and will have sole editorial control over the GH System, including the presentation of any content provided by Restaurant (“Restaurant Content”). Restaurant Content may include, without limitation, menus, photographs, trademarks and logos. For the term of the Agreement and for six (6) months thereafter, Restaurant hereby grants to GH a royalty-free, worldwide, sub-licenseable, transferable, fully paid-up, irrevocable right and license to use the Restaurant Content on the Systems, and for marketing and promotional purposes via any means now known or hereinafter developed.
-----

So, breaking that down, the restaurant grants GrubHub a license to use the Restaurant's trademarks - i.e. the name of the restaurant - for marketing and promotional purposes "via any means now known". I don't see why a mini-site connected with the GH ordering system does not qualify as a marketing vehicle using a known means.

 

[TCK]

Apparently GrubHub and their subsidiary registered over 24,000 domains. They are mostly of smaller mom-and-pop restaurants that haven't yet registered their domains or versions of registered restaurant domain names, including those available in other extensions. Here is the entire list:

https://docs.google.com/spreadsheets/d/1m9vszEQ9A13tN4AFRXWXVKZamRpQFIltP452wSqAvFM/edit#gid=0

It seems to be an effort to rank better for people searching for those restaurants and divert traffic that would otherwise land on the actual restaurant sites, if they had one already. For example, some restaurants registered domains that are not great and include the city in the domain. Meanwhile their name remained available without the city name at the end, that GrubHub reg'd. So it was just an exploitation of those restaurants' lack of Internet/domain savvy.

 

[BrandEntrance.com]

I don't know how Grubhubs terms and conditions reads but competing and impersonating with the customers own website (to ensure their commission) is the absolute crappiest thing I ever heard of. I wonder how they want the customers to respect them.

This will hurt them.

Time to find a new com name for the new competitor that takes over. If I had money in Grubhub I would be worried now.

 

[BRANDERX]

incredible story..

There's more to it I think.. who knows...

 

[TCK]

It's their SHAREHOLDER who greedy enough to trespass the ethical line

It’s one thing that Grubhub needs to show profit and growth. It’s another whether the shareholders were aware of this practice. This certainly was not the way to go about it.

 

[domainer111]

wow this is one of the biggest stories of the year!

It's big because it's the non-domainer community talking about domains.

On the plus side, at least it's highlighting the power of domain names.

On the negative side, there is the cloud of cybersquatting hanging over it.

Here's what stocktwits.com had to say about it in their morning eMail:

============================
Grubhub Accused of Getting too Hungry
Grubhub has allegedly bought some 23,000 domains posing as websites for businesses the delivery company either works with or is pitching—without those businesses’ knowledge, according to New Food Economy.

What that looks like: When you order cookies to cure your Chernobyl-induced anxiety, you might end up on a Grubhub-owned site that looks just like the page of your local sweet tooth fix, order form and all. But Betty's Bakery had nothing to do with the website.

FYI, Grubhub denies the so-called “cybersquatting,” saying the sites it owns boost orders and do restaurants a favor.

But restaurants are up in arms, suggesting Grubhub’s misleadingcustomers who want to circumvent the service and its fees.

• Grubhub, which is the largest online ordering platform in the U.S., charges restaurants a 3–15% commission fee on regular orders. Orders on Grubhub’s shadow sites can add a fee of up to 20%.

Zoom out: When did food delivery get so cutthroat? When other services (like Uber Eats, with its gross bookings of $3.1 billion in Q1) started coming for Grubhub’s crown.

===================

 

[carob]

Grubhub ate my name!
What a story. If they hand it over to you, you get a free domain. But as for bad faith, if they intended to profit from the domain at your expense- think diverting business for increased commission - then it would indeed be a bad faith registration

Story says they have stopped buying domains, but that does not stop them setting up webpages on a domain of their choice that still outrank the restaurant's own site in search.

So when is Grubhub going to start delivering cannabis edibles?

 

[offthehandle]

then it would indeed be a bad faith registration

I fail to see any good faith in this sort of business practice. Grubhub should offer to build out mini sites, require restaurants to pay yearly or say a 5 year domain registration paid directly to the registrar to control their own domain name by these business owners before even contracting with them. It should be up front full disclosure and if restaurant objects to paying, then they should not be allowed on the platform and were advised.

 

[Gube]

I wonder if they paid premium for any of these domains or they are all hand reg'd. Must be fun hand reg'ing 22k plus domains

They probably used an api to find all the domains (and register them)
Or their program made a list of domains and an human reviewed them before "throwing 8$ on every domain"

 

[offthehandle]

Nobody posted GH Terms, so here:

Restaurants cannot technically sell direct?, once they become a Grubhub customer? ! Business owners are signing up for a service which is independent contractor driver delivery. I dont see anything detailed in writing about what if any marketing services including domain name registration is in the GH Restaurant agreement. Proprietary must be the domain name registration. Lol.

“Restaurant acknowledges that all Customer Data is the sole and exclusive property of GH (or, as applicable, the GH Partner).”

GH is not an Agent for restaurant:

“GH and Restaurant are independent contractors, and nothing herein may be construed to create any agency, partnership or joint venture between them. Notwithstanding anything to the contrary, neither party has any authority of any kind to bind the other party in any respect whatsoever. ”

Arbitration is agreed up front upon signing in and no class action.

“Restaurant and GH agree that all claims or disputes arising out of the Agreement will be decided by an arbitrator through arbitration and not by a judge or jury (“Arbitration Agreement”).”

“The parties agree to bring any claim or dispute in arbitration on an individual basis only, and not as a class or collective action, and there will be no right or authority for any claim or dispute to be brought, heard or arbitrated as a class or collective action (“Class Action Waiver”)”

https://get.grubhub.com/legal/grubhub-restaurant-terms.html

 

[jberryhill]

It's also worth pointing out that the contract has a mandatory arbitration clause, so there aren't going to be any lawsuits either.

 

[jberryhill]

Registering a domain name is imo intentionally not listed

Maybe, but you also try not to foreclose “things we hadn’t thought of yet” when you write these kinds of things. If the restaurant hasn’t registered their domain, and if their policy was to turn over the domains If the restaurant wanted it back, I’m hard-pressed to see the harm in it.

 

[BrandEntrance.com]

According to the referenced article, Grubhub official statement is:

"Grubhub has never cybersquatted, which is identified by ICANN as 'generally bad faith registration of another person's trademark in a domain name.' As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it."

I can't think of any mom-and-pop restaurant that would register a trademark, unless they are planning to go corporate with a national chain. So that statement is ridiculous.

Did they tell the restaurants that they were doing this?

I wonder if they have opened up for a huge lawsuit or 3.

 

[EZPZYO]

In all probability, the contract that the restaurant signs with Grubhub expressly grants Grubhub a license in the restaurant’s mark that is broad enough to do that.

Grubhub’s response mentions their contract, and it is unlikely that they wouldn’t have provided themselves the right to do it in the contract.

Catch 22

 

[TCK]

In all probability, the contract that the restaurant signs with Grubhub expressly grants Grubhub a license in the restaurant’s mark that is broad enough to do that.

Grubhub’s response mentions their contract, and it is unlikely that they wouldn’t have provided themselves the right to do it in the contract.

They may be protected legally but it still looks very bad. How many mom-and-pop shops have actually read the contract? Plus their fake sites look very amateurish.

https://www.dnplaybook.com/big-domain-fail-for-grubhub/

 

[IMEZI]

It is beyond me that a company the size and with the number of clients as Grubhub couldn’t see that logic. It comes down to pure greed.

It's their SHAREHOLDER who greedy enough to trespass the ethical line

 

[Gube]

I'm currently working on a restaurant booking platform in Belgium and I did something similar to improve my visibility in search results but also restaurant's visibility.
But restaurants are able to update the content we display on their site and they pay a lower commision on bookings made via their website (compared to the platform)
By the way, Takeaway .com does the same

Gube