The fast-food chain McDonald's Israel to Offer Free Product as Part of Class Action Settlement

McDonald's Israel will soon offer customers a free product with their online orders, following a class action settlement approved today (Tuesday) by the Central District Court in Lod. The settlement, which resolves claims of misleading pricing, will allow online orderers to select one free item from three options: a half-liter bottle of water (NIS 13), a 330 ml can of Coke Zero (NIS 10), or regular-sized fries (100 grams, NIS 18).

The free product offer will appear automatically during the online order process. When selecting delivery, a prompt will appear at the end of the order, stating: "According to a class action settlement, you are entitled to one of the following products, free of charge." Customers can then choose from the available items or opt out of the benefit.

If a product is unavailable, it will be marked as “temporarily out of stock,” allowing customers to choose from the remaining options. The offer can only be redeemed once per customer.

Class Action Lawsuit Background
The class action, filed in 2020, was centered around the pricing disparity between McDonald's delivery menu and its in-store or takeaway menu. The plaintiff, represented by attorney Assaf Cohen, argued that McDonald's failed to inform customers that the prices for products ordered through the delivery app were higher than those for self-pickup or dining in, in addition to the delivery fees. The claim suggested this practice misled consumers into paying more without being fully aware of the price difference.

In response, McDonald's Israel maintained that the price difference was justified due to added costs for preparation and packaging for delivery and that consumers were aware of the different pricing through the app. However, the court ruled that McDonald's was required to disclose this price difference more clearly, as it constitutes material information under consumer protection laws.

Settlement Details and Compensation
As part of the settlement, McDonald’s Israel has agreed to compensate consumers to the tune of 3 million shekels. The settlement also includes an amendment to McDonald’s online platforms, which now feature a clear disclaimer that delivery prices may differ from those in the restaurant. The statement reads: “The prices of products and the variety in deliveries differ from the restaurant menu.” This change aims to eliminate confusion and provide consumers with more transparency when ordering online.

Court Ruling and Consumer Impact
While the court ruled that McDonald's was not required to alter its delivery meal size or pricing model, it did approve the class action based on non-disclosure of the price difference. McDonald’s Israel added the new disclaimer to its app and website to comply with the ruling and prevent further consumer deception.

Despite these changes, McDonald’s reported that the addition of the disclaimer did not result in a decrease in the volume of delivery orders. However, the plaintiff's legal team argued that a subtle shift in consumer behavior may have occurred, as they planned to present expert testimony showing that the price discrepancy may have deterred some customers from ordering delivery.

The settlement agreement, which includes the free product offer, provides a resolution for the case and a way for affected consumers to receive compensation.