Summary:
A federal judge has declared unconstitutional a New York City law requiring food delivery companies to share customer data with restaurants.
The judge ruled in favor of DoorDash, Grubhub, and Uber Eats, stating that the law violated the First Amendment by improperly regulating commercial speech.
The law was intended to help restaurants recover from the pandemic by giving them access to customer information for marketing and outreach.
The delivery companies argued that the law violated the privacy rights of customers and threatened their data security.
The judge found that the city did not demonstrate a substantial interest in helping restaurants collect customer data and that there were less intrusive means to achieve that goal.
The decision is a major victory for the delivery companies, but it has been met with criticism from some restaurant industry groups.
NYC's Food Delivery Data Law Ruled Unconstitutional: A Win for DoorDash, Grubhub, and Uber Eats
A federal judge has struck down a New York City law that required food delivery companies like DoorDash, Grubhub, and Uber Eats to share customer data with restaurants. The judge ruled that the law violated the First Amendment by improperly regulating commercial speech.
The law, passed in 2021, was intended to help restaurants recover from the pandemic by giving them access to customer information for marketing and outreach. However, the delivery companies argued that the law violated the privacy rights of customers and threatened their data security. They also claimed that it harmed their own businesses by allowing restaurants to use the data to "poach customers away."
The judge agreed with the delivery companies, stating that the city did not demonstrate a substantial interest in helping restaurants collect customer data and that there were less intrusive means to achieve that goal. She suggested alternatives such as letting customers decide whether to share data, offering financial incentives to the companies to share data, or subsidizing online ordering platforms for individual restaurants.
The decision is a major victory for the delivery companies, but it has been met with criticism from some restaurant industry groups. The New York City Hospitality Alliance, a trade group representing restaurants and nightlife businesses, expressed disappointment with the ruling, arguing that it hurts small businesses and consumers.
The city's law department says it is carefully reviewing the court's decision and considering its options.
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