Free Speech

Eugene Volokh | 10.9.2025 6:04 PM

From Nat'l Retail Fed'n v. James, decided yesterday by Judge Jed Rakoff (S.D.N.Y.):

[T]he Algorithmic Pricing Disclosure Act … provides that any entity domiciled or doing business in New York that

sets the price of a specific good or service using personalized algorithmic pricing, and that directly or indirectly, advertises, promotes, labels or publishes a statement, display, image, offer or announcement of personalized algorithmic pricing to a consumer in New York, using personal data specific to such consumer, shall include with such statement, display, image, offer or announcement, a clear and conspicuous disclosure that states: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA."

The Act defines "personalized algorithmic pricing" as "dynamic pricing set by an algorithm that uses personal data," which the Act further defines as "any data that identifies or could reasonably be linked, directly or indirectly, with a specific consumer or device." The Act excludes from this definition location data used by a "for-hire" or "transportation network company" vehicle to calculate a passenger's fare based on mileage and travel time. The Act also excludes from its coverage entities that are regulated under state insurance law and certain regulated financial institutions, as well as discounted prices offered to consumers under "existing subscription-based agreement[s]." …

Just as the First Amendment limits the government's power to restrict expression, it also curtails its power to compel speech. To determine whether a particular law runs afoul of these limits, courts employ different levels of judicial scrutiny, depending on the type of expression and the nature of the restriction at issue.

On the whole, laws regulating commercial speech are subject to a less-exacting standard of review than are laws regulating other forms of speech. Under this umbrella, restrictions on speech are also treated differently from compelled disclosures.

A law that prohibits or restricts commercial speech must survive so-called "intermediate" scrutiny in order to pass constitutional muster. This means that the regulation must "directly advance[ ] a substantial governmental interest" and must not be "overly restrictive." By contrast, a law that requires the disclosure of "'purely factual and uncontroversial information' about the goods or services the speaker may offer" is governed by the more permissive Zauderer standard of review. Under Zauderer, a commercial disclosure law does not offend the Constitution so long as it is "'reasonably related to the state's interest in preventing deception of consumers,' and [is] not 'unjustified or unduly burdensome.'"

Under Zauderer, the fact that First Amendment scrutiny applicable to........

© Reason.com