Second Circuit Strikes Down NYC Law Forcing Food Apps to Share Customer Data
The Second Circuit struck down NYC's Local Law 152 requiring food app data sharing.
Why it matters: The ruling limits local governments' ability to compel data disclosure from tech platforms, impacting compliance strategies and litigation risk in the gig economy. Legal counsel must reassess obligations around mandated data sharing and free speech rights.
- NYC Local Law 152 required delivery apps like DoorDash and Grubhub to share customer data — names, phone numbers, emails, addresses, and order details — with restaurants.
- The Second Circuit Court of Appeals ruled on June 24, 2024, that the law violates the First Amendment by compelling speech through forced data disclosure.
- Fees on food delivery apps rose 11% for merchants and 36% for consumers amid economic pressures in the delivery industry.
- The ruling underlines challenges for local governments balancing business support with constitutional protections for privacy and speech.
On June 24, 2024, the Second Circuit Court of Appeals invalidated New York City’s Local Law 152, which mandated food delivery platforms share customer data with restaurants. The law aimed to empower restaurants to build direct customer relationships by accessing names, phone numbers, email addresses, delivery locations, and order histories.
The court found the law unconstitutional, stating it "compels speech by mandating disclosure of private information," thus violating First Amendment protections. It highlighted the limits on government’s power to require companies to reveal customer data, referencing privacy and free speech rights.
The ruling emerges amid changing industry dynamics. According to a NYC government report, delivery apps increased fees charged to merchants by 11% and fees to consumers by 36% as economic pressures mounted. Weekly deliveries rose 2% year-over-year, totaling 2.72 million completed deliveries per week.
This decision marks a significant precedent in the legal landscape governing gig economy platforms, limiting how local authorities can impose data-sharing requirements. Legal professionals advising tech companies and regulators should evaluate how this ruling affects compliance obligations and potential challenges to similar data disclosure laws.
By the numbers:
- June 24, 2024 — Date of Second Circuit ruling on NYC Local Law 152
- 11% — Increase in delivery app fees charged to merchants
- 36% — Increase in fees passed to consumers by delivery apps
Yes, but: While the ruling restricts compelled data sharing, local governments may pursue alternative regulatory approaches that comply with constitutional limits.
What's next: Stakeholders can expect further litigation on data privacy and compelled speech as cities seek to regulate digital platforms amid gig economy growth.