Food Fairness Act: Protecting Small Businesses
A bill signed into law in Monroe County, NY this week will prohibit third-party food delivery services from listing, advertising, promoting, or selling a restaurant’s menu item without a written business agreement. This new legislation allows restaurants to request removal of restaurant references or menu item listings from the third-party delivery service website or app, and the delivery service must remove such listings within five days. This is just one of many examples that highlight state government efforts to protect small businesses, especially in light of the Covid-19 pandemic. Many restaurants suffered as a result of the pandemic and struggled to remain open, and some began their own delivery services or privately contracted for such services with third parties.
California and New York City are among the list of states and cities that implemented delivery fee regulations for third-party delivery services, ensuring that, among other things, customers are not overcharged in delivery fees and receive itemized receipts that outline cost and fees. These type of caps and restrictions follow complaints that allege third-party delivery services are overcharging consumers and adding businesses to the delivery service without consent. However, consumers will likely not see a decrease in cost for using the delivery service because some of the delivery services now charge a “regulatory response fee” to account for the cap on delivery fees.
Additionally, the City of Chicago filed two lawsuits against two major third-party delivery services alleging deceptive and unlawful business practices for misleading consumers into believing that there was a business partnership between the restaurant and third-party delivery service. As a result of these types of complaints, some third-party delivery services are voluntarily (or at the request of the restaurant) removing such listings or references, absent a business agreement with the restaurant, and others are dropping the practice altogether, absent an agreement.