California Enacts New Law Regulating Food Delivery Apps
Posted in Legal Bites
California Enacts New Law Regulating Food Delivery Apps

On September 24, 2020, Governor Newsom enacted AB-2149, the Fair Food Delivery Act of 2020. The new law prohibits food delivery platforms from arranging for the delivery of food delivery orders without the express authorization of the food facilities. 

The law amends Business and Professions Code Section 22.4 to state: “[a] food delivery platform shall not arrange for the delivery of an order from a food facility without first obtaining an agreement with the food facility expressly authorizing the food delivery platform to take orders and deliver meals prepared by the food facility.”

The new law defines a “food delivery platform” as an online business that acts as an intermediary between consumers and multiple food facilities to submit food orders from a consumer to a participating food facility, and to arrange for the delivery of the order from the food facility to the consumer.

The California Restaurant Association expressed support for the bill and stated: 

“Over the past couple of years there has been an alarming trend of food delivery platforms listing a restaurant's logo or menu without permission from the restaurant. This type of business practice may help food delivery apps drive traffic to their platform and generate commissions but for restaurants it creates confusion, hurts their brand, and disrupts operations. […] When a food delivery platform uses a restaurant's logo or menu it implies to the consumer that a partnership exists between the two entities. […] We believe all food delivery platforms should commit to partnerships that are mutually beneficial. When a food delivery platform uses a restaurant's logo or menu without their permission the benefit to the food delivery platform outweighs any potential benefit of expanding a restaurant's customer base. This bill will help restore equity back into the relationship.”

The law will go into effect on January 1, 2021.

  • Pooja S. Nair
    Partner

    Pooja S. Nair is a business litigator and problem solver with a focus on the food and beverage sector. She advises food and beverage clients, startups and other businesses on a comprehensive range of issues, including employment ...

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