Judge gives final approval to Groupon settlement over inaccurate listings

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Update:

• A federal judge in Illinois gave final approval to a settlement between Groupon and a pair of businesses who argued the e-commerce company inaccurately described the businesses it listed and advertised false deals. 
• The settlement will benefit a nationwide class of more than 2.5 million small businesses. 
• Per the agreement, class members will be able to edit, claim or ask Groupon to remove their business listing from its platform and expired deals from search engines. 
• Groupon will also be required to add a disclaimer to the landing pages for businesses it lists that inform consumers they have no affiliation with the company. 
• Salon Phoenix Cosmetology LLC and Salon Hairroin Inc. filed the class action lawsuit against Groupon in Dec. 2022.

Groupon class action lawsuit overview: 

• Who: Salon Phoenix Cosmetology LLC and Salon Hairroin Inc. filed a class action lawsuit against Groupon Inc. 
• Why: Salon Phoenix Cosmetology and Salon Hairroin claim Groupon profits by listing small businesses on its discounted goods and services website without permission. 
• Where: The class action lawsuit was filed in Illinois federal court. 
  

(Dec. 22, 2022)

Groupon profits off the unauthorized misappropriation of small businesses’ goodwill and reputations by listing them on their discounted goods and services website without permission, a new class action lawsuit alleges. 

Plaintiffs Salon Phoenix Cosmetology and Salon Hairroin claim Groupon lists tens of thousands of small businesses — including theirs — on its website without their permission or consent, despite not being able to actually offer any discounted services. 

Salon Phoenix Cosmetology and Salon Hairroin argue Groupon lists their businesses on its website to divert new traffic to its website, thereby “creating new business for Groupon and its affiliated third-party merchants.” 

“Groupon does not and cannot actually offer customers any discounted services at Salon Phoenix, nor at many of the tens of thousands of other small businesses that appear on Groupon’s website without consent,” the Groupon class action lawsuit states. 

Salon Phoenix Cosmetology and Salon Hairroin want to represent a nationwide class and New Jersey class of all individuals or entities Groupon has listed on its website through the creation of a business landing page without their permission.

Groupon accused of inaccurately describing services and operations of small businesses listed on its website

In addition to allegedly not having permission to list the small businesses on its website, Groupon also “inaccurately and falsely” describes the services and operations the businesses offer, the Groupon class action alleges. 

Salon Phoenix Cosmetology and Salon Hairroin claim Groupon is in violation of the Lanham Act, common law unfair competition and the Illinois Consumer Fraud and Deceptive Business Practices Act, among other things. 

The plaintiffs are demanding a jury trial and requesting declaratory and injunctive relief along with an award of compensatory, actual and punitive damages for themselves and all class members.

Groupon agreed to pay $13.5 million earlier this year to resolve claims the company misled its investors about its financial state before announcing it planned to stop selling physical goods and that two of its executives were departing. 

Have you had your business listed on Groupon without your permission? Let us know in the comments.

The plaintiffs are represented by Raphael Janove, Adam Pollock and George Krebs of Pollock Cohen LLP, and Jacob S. Briskman. 

The Groupon class action lawsuit is Salon Phoenix Cosmetology LLC, et al. v. Groupon Inc., Case No. 1:22-cv-07162, in the U.S. District Court for the Northern District of Illinois. 

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