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Bill to Increase Protections for Small Businesses Sails Through Assembly Floor

For immediate release:

AB 502 by Assemblymember Alex Lee sailed out of the Assembly Floor with unanimous bipartisan support (68-0). In order to protect our small businesses, AB 502 would prohibit a listing service, such as Yelp or Google, from posting a phone number under a restaurant that does not go directly to the restaurant. It would also require a disclosure to the consumer if an order they are placing through the listing service will result in a cost to the restaurant.

In the pandemic economy, many businesses had to pivot to food delivery services to survive. When calls are rerouted through these third parties, customers might not be aware that when calling their local restaurant to place an order, it could actually be rerouted and cost the restaurant money. By strengthening protections for our small businesses and providing more information to consumers to make informed choices, our small businesses will have a better chance at being able to recover and thrive.

“When I introduced this concept last session to prohibit food delivery platforms from charging referral commissions on forwarded calls, Yelp actually changed their policy and ended the practice of call forwarding, because even they agreed that the practice was unethical,” said Assemblymember Alex Lee. “Now, AB 502 will codify this practice in statute to ensure no listing service posts a phone number that does not go directly to the restaurant so we can protect our business community from unscrupulous charges.”

The previous iteration, AB 1444, was vetoed by Governor Newsom and would have prohibited food delivery platforms from charging a food facility for certain forwarded calls. Instead, AB 502 would empower consumers to make more informed choices by requiring a disclosure if an order placed through a listing service, such as Yelp or others, will result in a fee or commission paid to a party other than the restaurant.

AB 502 is co-authored by Assemblymember Buffy Wicks (D-Oakland).