Groupon Lawsuits: An Overview
A groupon lawsuit is currently in front of a judge for the purpose of resolving whether it will be eligible for class-action status or if it should settle first before going to trial. This is one of several Groupon lawsuits in front of a judge, which all seek to determine whether it was legally liable for encouraging and facilitating the sale of goods on its website.
In July, a group of Groupon customers filed a class-action lawsuit against the online coupon company in U.S. District Court in California. In August, a California state judge approved a group-action settlement offer by Groupon and has approved a settlement amount of $8.5 million to a settlement fund.
While plaintiffs charge that Groupon pressured consumers to purchase their goods through their site and impose “onerous” sales conditions, they’re mainly upset with the short expiration periods. As a result of the settlement, Groupon will have to refund any money that has been claimed, pay consumer fees to the plaintiffs’ lawyers, and accept responsibility for all attorney fees. Groupon will also have to make its terms and conditions known in the future to its affiliates.
The Groupon lawsuit is one of several lawsuits in front of a judge in which plaintiffs claim that the coupon site knowingly promoted and facilitated illegal activity by third parties on its site. This past April, Groupon settled similar lawsuits brought against it by three California shoppers who claimed that they were scammed out of thousands of dollars when purchasing discounted merchandise from its site. In February, a California group sued the coupon site for allowing a third-party to use its logo to sell items that weren’t allowed on its site. Groupon has yet to respond to this group suit.
To date, Groupon has settled at least two other lawsuits against its site in U.S. District Court. A couple of years ago, a group of parents in Maryland filed a Class Action Lawsuit in U.S. District Court in Baltimore against Groupon, claiming that the site offered to ship children’s products without warning, which led to the parents not being able to keep track of children’s orders. In 2020, a group of Virginia consumers claimed that Groupon charged them too much for shipping costs and sent goods that were not delivered.
Groupon has been in front of several U.S. Federal District Court for the purpose of determining whether it is liable for violating the Sherman Act. laws by allegedly promoting and facilitating fraudulent transactions in the form of coupons. These schemes involved an individual or entity offering to buy goods from a business, then offering to deliver those goods to the business through “bulk” mail and drop-shippers, thereby increasing its own profits, without paying the seller for the goods.
The FTC has charged that Groupon has violated this law in several ways. For instance, when a business sends bulk orders to Groupon affiliates, the business doesn’t deliver goods on time, which is a violation of the law. It isn’t clear, however, that this violation is enough to warrant FTC action.
Groupon is also being investigated by the SEC for allegedly violating the Anti-Trust Act by providing false advertising when it claimed that it would send a member’s email address to marketers of Groupons for a commission. That email address was used for email campaigns, which is prohibited. A Groupon lawsuit also claims that the online coupon site sent the same email to members, promising a reduction in shipping charges.
In addition to being investigated by the Federal Trade Commission, Groupon is under investigation by the U.S. Attorney’s Office for the Northern District of Illinois. The U.S. Attorney’s Office has charged that members of the coupon group abused the system by flooding members’ email with spam messages. A U.S. Federal Trade Commission investigation into the Groupon website has concluded with no charges against the company.
Groupon claims that it does not believe the lawsuits against it are fair. It says it offers a legitimate way for consumers to earn money online by marketing products online. Its attorneys have even gone so far as to say that the FTC has no basis for pursuing the case and that the Groupon website has taken unfair advantage of merchants who use coupons to drive up prices for their goods.
It’s unclear how much Groupon’s attorneys will be able to recover from the legal costs associated with the lawsuits. This is especially true since many of these lawsuits involve a third party taking the place of a business. Groupon attorneys have said that they will need to pay some attorney’s fees from any settlement amount received from a lawsuit.