A federal judge ruled Tuesday that a New York City COVID-19 law requiring food delivery companies to share customer data with restaurants is unconstitutional.
U.S. District Judge Analisa Torres said the law violates the First Amendment by improperly regulating commercial speech. Her decision marked a legal victory for the three major food delivery companies that sued: Uber Eats, Grubhub, and DoorDash.
The law requires delivery companies to provide restaurants with customers' names, delivery addresses, contact information and order details. City officials said the law went unenforced while the litigation was ongoing.
The three companies argued that the law is exploitative and threatens customer privacy and data security.
Their main argument was about their own business, claiming that it would harm them because restaurants could use the data for marketing purposes and “steal customers.”
The law was strongly supported by the New York City Hospitality Alliance, a nonprofit that represents restaurants and nightlife venues, whose executive director, Andrew Rigie, urged an appeal, saying Torres' decision would “harm small businesses and consumers.”
Torres found that the city has never shown much interest in helping restaurants collect data from delivery companies, noting that there are less intrusive ways to help, such as giving customers the choice to share their data or offering financial incentives for delivery companies to share it.
DoorDash celebrated the ruling, saying it “rightly recognized that this law would violate New Yorkers' fundamental First Amendment right to protect their data.”
The legislation was enacted in the summer of 2021 as one of a range of measures to help restaurants recover from the damage sustained during the COVID-19 pandemic and lockdown.
The city Law Department is currently reviewing the ruling, spokesman Nicholas Paolucci said.
With post wire
