Commentary

North Carolina Agrees To Stop Asking For Names Of E-Commerce Purchasers

To resolve a privacy lawsuit brought by Amazon and the ACLU, the state of North Carolina has agreed to stop asking all e-commerce sites for information about state residents who have made online purchases.

The move comes several months after Amazon and seven state residents convinced a federal judge in Seattle that North Carolina's request violated residents' free speech rights to purchase books and movies anonymously.

The dispute started last year, when North Carolina's Department of Revenue attempted to police state tax laws by requesting records of all Amazon purchases made since 2003. Amazon responded by seeking an order from a federal court in Seattle (where it's based) declaring North Carolina's request unconstitutional. Seven North Carolina residents (represented by the ACLU) intervened in the case. They argued that the government's request violates their privacy and their First Amendment rights to read anonymously.

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Last October, a federal judge issued a ruling that sweepingly vindicated online purchasers' First Amendment rights. "The [Department of Revenue] concedes that it has no legitimate need or use for having details as to North Carolina Amazon customers' literary, music, and film purchases," the judge wrote. "With no compelling need for both sets of information, the DOR's request runs afoul of the First Amendment."

The settlement, which was quietly entered late last month, is even broader than the judge's decision because the settlement affects Web users who have made purchases at all e-commerce companies, not only Amazon.

The ACLU rightly calls the settlement "a great win for privacy."

"Requesting information about what people are purchasing online causes real harm, to real people, and it is unconstitutional in these circumstances," the civil liberties organization writes.

1 comment about "North Carolina Agrees To Stop Asking For Names Of E-Commerce Purchasers".
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  1. Robert Repas from Machine Design Magazine, February 11, 2011 at 12:39 p.m.

    I agree that N. Carolina's taxing authority has no need to know what people bought online. But I see nothing that would prevent seeking the amount spent (not what it was spent on) and whether it was a taxable or non-taxable expenditure.

    However, I've always felt that the Internet sales tax problem is best handled by setting the sales tax at the location of the business operating the Web site, not the state of the purchaser -- exactly the same as if the buyer drove to the store and bought the item there. Companies wouldn't need to track thousands of differing tax rates, the monies would be collected at the time of sale, and it would entice states to try to lure more Internet connected businesses to them, as that would increase the state tax base.

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