WLF Asks Second Circuit to Strike Down Algorithm-Phobic New York Disclaimer Law

“A targeted ad with a computer-generated price isn’t Skynet, it’s a direct commercial solicitation protected by the First Amendment.”
—Zac Morgan, WLF Senior Litigation Counsel

Click here to read WLF’s brief.

(Washington, DC)—Washington Legal Foundation (WLF) today asked the United States Court of Appeals for the Second Circuit to reverse a lower court decision that upheld a New York law forcing retailers to place cigarette-style warning labels on targeted advertisements if the proposed price is set by a computer program.

The case arises a law that requiring such offers come with a “clear and conspicuous” warning that “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” While that ominous warning suggests a privacy breach carried out by a scary machine, that’s not the case. Such personalized solicitations are often derived from a shopper’s browsing history on a retailer’s website (such as leaving an item in a shopping cart and declining to check out), which might, in turn, generate a computer-generated offer to buy the item at a discounted price. The district court determined that this compelled-speech regime complied with the First Amendment because the merchants’ association challenging the law couldn’t show that the disclaimer wasn’t technically true.

WLF’s brief explains why that’s wrong. The First Amendment requires the government to justify why it’s telling a private actor what to say—it doesn’t shift the burden to private speakers to explain why the government can’t take over their speech. So New York must show that its compelled speech regime is a narrow means of staving off critical harm—like a risk of mercury poisoning, cancer, or fraud—or it violates the Constitution. New York failed to do so. As the brief notes, “[t]he State may not like that computer programs can make a willing seller more properly match the price point of a willing buyer, but there’s no public harm when markets clear.”