A federal judge on Tuesday declared unconstitutional a New York City law requiring food delivery companies to share customer information with restaurants.
US District Judge Analisa Torres in Manhattan ruled in favor of DoorDash, Grubhub, and Uber Eats, saying the law violates the First Amendment by unduly regulating commercial speech.
New York City adopted the law in the summer of 2021, one of many measures to help thousands of restaurants recover from the COVID-19 pandemic.
Delivery companies were required to provide restaurants with customer names, delivery addresses, email addresses, and phone numbers, as well as order content.
Although the city said the requirements protect restaurants from “exploitative practices” by delivery companies, it has agreed not to enforce the law while the companies sue.
The companies have argued that the law violates customers’ privacy rights and threatens the security of their data.
They also say it hurts their businesses because restaurants can use the information to market and “deceive customers.”
Nicholas Paolucci, a spokesman for the city’s legal department, said: “We are reviewing the court’s decision carefully.
Torres said the city hasn’t shown much interest in helping restaurants collect customer information from delivery companies, and said there are few ways to accomplish that goal.
He said these methods include letting customers decide whether to share data, giving companies money to share data, and subsidizing online ordering platforms for individual restaurants.
DoorDash said the decision “clearly recognizes how this law would violate the bedrock First Amendment rights of how we protect New Yorkers’ data,” while Grubhub said it “strengthens the privacy protections New Yorkers deserve.”
UberEats and its lawyers did not respond to requests for comment.
The legislation received support from the New York City Hospitality Alliance, a trade group for the restaurant and nightlife industry.
Its chief executive Andrew Rigie said Torres’ decision “harms small businesses and consumers.” We urge the city to appeal.”
Cases in the US District Court, Southern District of New York, are DoorDash Inc v. New York City, Number 21-07695; Portier LLC v. New York City, No. 21-10347, and Grubhub Inc v. New York City, Number 21-10602.
-Jonathan Stempel, Reuters
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