Court rules Amazon doesn't have to turn over customer names

North Carolina's Department of Revenue violated the First Amendment in asking for names of customers who bought books, a Washington judge ruled on Monday.

The ruling is a win for free speech advocates, but the ACLU may continue to pursue the issue because the ruling may not prevent similar requests for broad customer data in the future.

The lawsuit has its roots in a dispute over whether Amazon must pay sales tax on goods shipped to North Carolina residents. As part of its investigations into the issue, North Carolina asked Amazon to send it "all information for all sales" to customers in the state.

Amazon complied by sending specific information, including book titles, about products shipped to North Carolina. The trouble started when North Carolina then asked for the names and addresses of customers. Amazon subsequently asked the court to rule that sending customer names to North Carolina violates the customers' First Amendment rights because the state would then be able to match people's names with specific book titles.

The ACLU joined the case on behalf of people who fear the government tracking their online purchases.

North Carolina has said that it doesn't need specific information about products like book titles, despite its broad request for "all information." But it also says that procedural issues prevent it from returning the original discs that Amazon sent to it with the specific data like book titles. Amazon is unwilling to send North Carolina customer names now since the state could match those names with specific book titles.

On Monday, Judge Marsha Pechman of the U.S. District Court for the Western District of Washington ruled in favor of Amazon's argument that North Carolina's request for customer names violates the First Amendment. She denied North Carolina's request to dismiss the suit.

"Issuing the declaratory relief as phrased does not prohibit the [Department of Revenue] from issuing a new request for information as to only the names and addresses of Amazon's customers and general product information, assuming that DOR destroys any detailed information that it currently possesses," the judge wrote in her ruling.

A spokeswoman with North Carolina's attorney general's office said that its attorneys are reviewing the ruling and have not made a decision about whether to appeal.

The judge did not rule on the ACLU and the interveners' arguments because they have not yet requested summary judgment. The ACLU isn't sure yet about its next steps, said Aden Fine, staff attorney at the ACLU. Because the ruling is specific to this situation, North Carolina could continue to issue broad requests for information from online retailers. In fact, North Carolina has said that other retailers have already turned over detailed information following its broad requests, he said.

Still, rulings like this one could encourage such small retailers to decline such requests for information from the government, said Braden Cox, policy counsel for NetChoice, an association of online companies. "Smaller online companies think they can't fight the state in court because they don't have the resources, so they just comply," he said. "Now that we have this ruling and the legal standing to make a broad statement of rights, this is something we'll engage more on to educate companies that they don't have to send this information, indeed they shouldn't really so they can protect the customer."

North Carolina isn't the only state where issues of online shopper privacy have cropped up. Cox noted that a new law in Colorado would require retailers to turn over information about products sold to people in the state. That law hasn't come into effect yet and there is a movement for its repeal, he said.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is

Copyright © 2010 IDG Communications, Inc.

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