NEW YORK, Aug 5 (Reuters) - A U.S. appeals court said on Wednesday that a New York City law requiring food delivery companies to share customers' data with restaurants is unconstitutional.
In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said the law violated the First Amendment's protection against compelled speech by requiring DoorDash, Grubhub and Uber Eats to disclose information about their customers, not simply information about services they provide.
The delivery apps were
required to provide restaurants with customers' names, delivery addresses, email addresses and phone numbers, as well as order contents.
New York City adopted the law in the summer of 2021, one of multiple measures to help restaurants recover from the COVID-19 pandemic.
The city had more than 23,600 restaurants in 2019, accounting for 317,800 jobs, according to court papers.
Neither the city's law department nor the office of Mayor Zohran Mamdani immediately responded to requests for comment. The delivery apps and their lawyers did not immediately respond to similar requests.
Wednesday's decision upheld a September 2024 ruling by U.S. District Judge Analisa Torres in Manhattan.
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Calling the restaurant industry "a key part of the city’s economic and cultural lifeblood," New York said its law would help protect restaurants from delivery apps' "exploitive practices," and help restaurants develop closer relationships with diners.
The apps countered that the law violated customers' privacy, threatened customers' data security, and empowered restaurants to use data they collect to poach customers away.
Circuit Judge Richard Wesley said the law went too far by presuming that all customers agreed to share personal information, and requiring customers to opt out order-by-order.
He said the city had "substantially less burdensome alternatives" such as requiring customers to "opt in" if they didn't mind sharing their information, a practice Uber Eats sometimes uses.
"The city identifies no reason, and offers no evidence, as to why customers must repeat the same refusal with every single order," Wesley wrote.
New York City agreed not to enforce the law while the companies sued.
(Reporting by Jonathan Stempel; Editing by Emelia Sithole-Matarise and Aurora Ellis)
