April 25, 2011
Partner Gonzalo E. Mon was quoted in the Crain's Chicago Business article, "Class-action Lawyers Target Groupon Over Expiration of Daily Deals." The article discussed the current lawsuits filed against Groupon by class-action lawyers, in cities ranging from Boston to San Francisco. These lawyers claim that Groupon's online discount deals expire too quickly which is a violation of state and federal laws. If these suits are successful, Groupon could lose millions and the business model that fuels their rapid growth could be undermined.
"If the court finds there's a violation, it will have a huge impact because it goes to the heart of their business model," said Mr. Mon.
Lawyers claim that the deals offered by the site, such as 50% discounts on meals or manicures, violate federal and state laws because the offers expire within a few weeks or months. They assert that these deals are gift cards, which under federal and state laws must remain valid for at least five years. This could prove to be detrimental to Groupon's relationship with participating merchants. Mr. Mon says two merchants already have asked him for advice about potential liability under gift-card laws on deal-of-the-day offers. He says that "there's a massive amount of issues to think about with these companies. And there are always new ones popping up."