I have mixed feelings about Groupon. Having been an executive at Mercata 10+ years ago, I recognize that they have gotten further than we did with the group buying model by a) waiting for there to actually be social media and b) delivering electronic goods (coupons) rather than hard goods. As a customer, I have satisfactorily participated in several groupons and as a business we have used it a couple of times as a promotional program. As an investor, I was short Groupon for quite a while, convinced that they had no particular barrier to entry for competitors like Amazon who could grab the market if there was enough money at stake.
So, all that aside, I was fascinated by the recent settlement of a class action lawsuit. Prior to the lawsuit, all customers could get a full refund of their Groupon through a simple contact with Groupon customer service. After the lawsuit, customers during the class action period can only get a partial refund and then only by going to a separate class website and hassling with forms and doing a lot of waiting. The plaintiffs will actually get less than they would have had the lawsuit not gone forward, the difference being the millions required to pay off the tort lawyers to go away.
Having just had to pay the fees of a tort lawyer who brought a frivolous suit against our company just to make him go away, I am sympathetic. Had the plaintiff approached me directly, I might have given her a few bucks just to settle and avoid getting lawyers involved. But instead the lawyer got part of his fees paid in the settlement and the plaintiff got zip. Basically just legal blackmail, with the plaintiff as unpaid pawn.