NEW YORK, Sept 24 (Reuters) - A federal judge on Tuesday
declared unconstitutional a New York City law requiring food
delivery companies to share customer data with restaurants.
U.S. District Judge Analisa Torres in Manhattan ruled in
favor of DoorDash ( DASH ), Grubhub and Uber Eats
, saying the law violated the First Amendment by
improperly regulating commercial speech.
New York City adopted the law in the summer of 2021, one of
multiple measures to help its thousands of restaurants recover
from the COVID-19 pandemic.
Delivery companies were required to provide restaurants with
customers' names, delivery addresses, email addresses and phone
numbers, as well as order contents.
Though the city said the requirements protected restaurants
from delivery companies' "exploitive practices," it agreed not
to enforce the law while the companies sued.
The companies argued that the law violated the privacy
rights of customers and threatened their data security.
They also said it harmed their own businesses because
restaurants could use the data for marketing and "poach
customers away."
Nicholas Paolucci, a spokesman for the city's law
department, said: "We are carefully reviewing the court's
ruling."
Torres said the city did not demonstrate it had a
substantial interest in helping restaurants collect customer
data from the delivery companies, and said it had less intrusive
means to achieve that goal.
She said these means included letting customers decide
whether to share data, offering financial incentives for the
companies to share data, and subsidizing online ordering
platforms for individual restaurants.
DoorDash ( DASH ) said the decision "rightly recognized how this law
would have violated bedrock First Amendment rights of how we
protect New Yorkers' data," while Grubhub said it "reinforces
the privacy protections that New Yorkers deserve."
UberEats and its lawyers did not respond to requests for
comment.
The law had drawn support from the New York City Hospitality
Alliance, a restaurant and nightlife industry trade group.
Its executive director Andrew Rigie said Torres' decision
"hurts small businesses and consumers. We urge the city to
appeal."
The cases in the U.S. District Court, Southern District of
New York, are DoorDash Inc ( DASH ) v. City of New York, No. 21-07695;
Portier LLC v, City of New York, No. 21-10347, and Grubhub Inc
v. City of New York, No. 21-10602.