Report from Courthouse News
In Brief – The National Retail Federation is urging the Federal Second Circuit Court of Appeals to revive its lawsuit challenging a New York law requiring retailers using customers’ personal data to set individual prices to display an all-caps warning stating prices were “SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” Their initial lawsuit was dismissed in 2025 after a judge found the disclosure helped prevent consumer confusion. The retailers argue that the forced notice violates their First Amendment rights and misleads consumers into believing sensitive information, such as race or Social Security numbers, determines prices, and that customer data can lead to lower price offers through discounts based on customers’ loyalty and voluntarily shared purchase histories. Judge Denny Chin questioned whether retailers could clarify and add context to the warning, but counsel for the retailers argued the government generally cannot compel businesses to convey its messages, and that if the state wants to regulate the practice, they should pursue that route, something that is in fact underway.
Context – So-called warning labels related to internal business pricing practices are just one of a growing number of digital policy issues involving First Amendment challenges to government-mandated corporate speech and mandated corporate silence. Although a district judge OK’d New York’s warning label related to pricing, a district judge blocked Colorado’s warning label regarding risks from social media. State laws requiring social media platforms to publicly report content moderation information have been found OK by a district judge in New York and not OK by a federal appeals court in California. Finally, when Maryland enacted its tax on digital advertising services in 2021, it included a provision that prohibited digital ad platforms, such as Google and Meta, from notifying their customers via bill statements that they were being charged the tax. A federal appeals court struck that provision down last year based on similar First Amendment precedents, equating mandated corporate silence with mandated corporate speech.