In an opinion Wednesday, Judge Torres held unconstitutional a New York City law mandating that online food delivery platforms like Door Dash share customer data (e.g., name, address, email, phone) directly with the restaurants from which customers order their food. The aim of the law was to allow the restaurants to tilt the balance of marketing power away from the online platforms and back to the restaurants.
Judge Torres first concluded that the law implicated speech (not conduct) under the First Amendment: “The Customer Data Law directly regulates what Plaintiffs can (indeed, must) ‘say’ to the restaurants that use their services. In other words, regulation of speech is the object—not an incidental byproduct—of the law.”
She next concluded that the law failed “intermediate” scrutiny because there was only a thin connection between the government interests at stake and the speech burden used to address the interest. The City argued that the law addressed “exploitative” practices like the platforms using data about one restaurant’s customers to pitch to those customers competitor restaurants or restaurants that pay higher fees. But Judge Torres found that the law did little to actually remedy those issues and reflected instead, a “mere preference for one industry over another”:
Although the City has explained why these practices harm restaurants and has established a substantial interest in regulating them, it has not provided evidence that the Customer Data Law will in fact affect the objectionable practice . . . The only effect that the Customer Data Law could have on [the “exploitative”] practices is to make it more desirable for restaurants, now equipped with data that they could use to target customers, to leave Plaintiffs’ platforms. But, even that has a “remote” connection to these practices, because restaurants can leave Plaintiffs’ platforms now, and Plaintiffs could continue these practices with whatever restaurants choose not to leave the platforms.
. . .
The City may prefer that restaurants have access to customer data, but a mere preference for one industry over another is not a substantial state interest.