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Web Merchants
Win in Court
S
EVERA L FEDERA L court cases within the past year
have ruled in favor of online retailers who had been
charged with violating privacy laws that restrict the use
of credit card information. Th e retailers include Zazzle.com
and Symantec. Th e trend emerging in these cases appears
to be a separation of online retailing from laws designed to
online purchase. Th e U.S. District Court for the Central
protect customers while they’re making credit card purchases
District of California ruled in favor of Symantec, arguing
in physical stores.
that the law did not apply to online retailers who need that
Yet, that these laws are undergoing new legal challenges
information to help verify a customer’s identity.
in the courts puts online merchants in an uncertain legal posi-
Th ere have been several cases brought under the Fair
tion going forward, said Eric Goldman, a law professor and
Credit Reporting Act. Not all of them resulted in court
director of the High Tech Law Institute at the Santa Clara
rulings that favored the retailers. In the case of Grabien
University School of Law. “Th e issue is what’s the diff erence
v. 1-800-Flowers.com Inc., the U.S. District Court for the
between online and offl ine interactions between customers
Southern District of Florida ruled in favor of the plaintiff . It
and retailers, and how we should apply these laws to the
decided that the law’s prohibition against printing a receipt
online world,” he explained. While some legal experts con-
with credit card information extends to online receipts. Th at
tend that Internet transactions should remain separate, others
case was consistent with an earlier ruling by the U.S. District
say the laws should treat online and offl ine the same. Still
Court for the Central District of California in Vasquez-Torres
others think the Internet should have even stricter privacy
v. StubHub Inc., which is an online tickets retailer owned
laws because of the risk posed when information is exposed
by eBay Inc.
online, Goldman added.
Th e following cases brought under the Fair Credit
Recent cases have involved complaints fi led by con-
Reporting Act, however, have since ruled in favor of retail-
sumers under the federal Fair Credit Reporting Act and
ers. In Smith v. Zazzle.com Inc., the U.S. District Court for
California’s Song-Beverly Credit Card Act. Th e Fair Credit
the Southern District of Florida ruled in favor of Zazzle in
Reporting Act prohibits retailers from printing receipts with
stating that the restriction on printing retail receipts applied
a customer’s full credit card number and card expiration date.
only to brick and mortar retail operations, not to retail web-
Th e Song-Beverly legislation prohibits retailers from requir-
sites. Th at ruling supported earlier rulings in the Southern
ing customers to provide their home address and telephone
District of Florida in the cases Grabien v. Jupitermedia Corp.,
number when making a credit card purchase.
Haslam v. Federated Department Stores Inc. and Edwin King
In each court case, the consumer plaintiff contended two
v. Movietickets.com.
things: Th at an online retailer violated the law by either issu-
Although these latest rulings bode well for online retail-
ing an online receipt with too much credit card account infor-
ers, web merchants should be prepared for ongoing legal
mation, or by requesting personal information in an online
challenges, warned Goldman. “People still haven’t thought
order form. In a case fi led in January, Saulic v. Symantec, the
through the broader implications for internet retailers,”
plaintiff complained that the soft ware retailer had violated
he said. WW
California’s Song-Beverly law by requiring the customer to
Information in this article was edited fr om a story on
enter a home address and phone number to complete an
Internet Retailer.com.
Find this story in our complete article archive at: www.wholesalecentral.com/Wholesale–News
14 May 2009
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