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ABSTRACT: Since the repeal of Prohibition in 1933, most states have relied on some form of a three-tier system to regulate the manufacture, distribution, and sale of alcohol. With the rapid changes in technology, e-commerce, and consumer habits today, the use of unlicensed third-party providers ("TPPs") to solicit and deliver alcohol orders on behalf of licensed retailers threatens to upend alcohol regulation and the three-tier system. This would be undesirable because it might frustrate several goals of alcohol regulation such as protecting public health and safety, ensuring a fair and orderly alcohol market, and holding entities involved in the alcohol industry accountable to the public. Examining Iowa Code section 123.46A, Iowa's third-party alcohol delivery law that was enacted in July 2021, this Note argues that more effective regulation of TPP activity can be achieved by: (1) issuing TPP licenses, (2) requiring licensed retailers to exercise control over every part of the transaction facilitated by TPPs, and (3) amending Iowa 's tied-house law to prohibit manufacturers and distributors from acquiring an economic interest in TPPs.
Introduction
On May 10, 2021, Iowa Governor Kim Reynolds signed into law House File 766, which makes it legal for licensed alcohol vendors in Iowa to deliver alcohol to consumers' homes via third-party providers ("TPPs").1 The law, which took effect July 1, 2021,2 marks a recent trend among several states toward relaxing alcohol regulation laws in an effort to stimulate economic activity during the COVID-19 pandemic.3
There has been "a[n] [incredible] proliferation of startup" third-party delivery apps in the past decade ranging from grocery and food deliveries to household tasks.4 During the COVID-19 pandemic, revenue generated from food delivery apps, like DoorDash and UberEats, more than doubled in 2020 compared to the previous year.5 Today, with just about every commodity imaginable becoming available via e-commerce, adding alcohol to the list makes sense. Indeed, specialized alcohol delivery apps like Drizly have already been around for several years,6 and food delivery apps like DoorDash have expanded their services to include alcohol deliveries in states that allow it.7 These delivery apps, also known as TPPs,8 normally take customer orders from a mobile app, transmit the order to the retailer, pick up the order from the retailer, and deliver it to the customer's home.9...