Amazon wins fight to keep customer records private

Posted: October 26th, 2010 by Militant Libertarian

by Declan McCullagh, CNet

In a victory for the free speech and privacy rights of customers, a federal judge ruled today that the company would not have to turn over detailed records on nearly 50 million purchases to North Carolina tax collectors.

The state had demanded sensitive information including names and addresses of North Carolina customers–and information about exactly what they had purchased between 2003 and 2010.

U.S. District Judge Marsha Pechman in Washington state said that request went too far and “runs afoul of the First Amendment.” She granted Amazon summary judgment.

The Tar Heel State’s tax collectors have “no legitimate need” for details about the literary, musical, and cinematic habits of so many Amazon customers, Pechman wrote. “In spite of this, [North Carolina] refuses to give up the detailed information about Amazon’s customers’ purchases, while at the same time requesting the identities of the customers and, arguably, detailed records of their purchases, including the expressive content.”

Amazon has provided the state tax collectors with anonymized information about which items were shipped to which ZIP codes. But North Carolina threatened to sue if the retailer did not agree to divulge the names and addresses linked to each order–in other words, by providing personally identifiable information that could be used to collect additional use taxes that might be owed by state residents.

Pechman’s opinion did leave open the possibility of North Carolina tax collectors deleting the data they currently have and firing off a narrower request to the online retailer: “Issuing the declaratory relief as phrased does not prohibit [N.C. tax collectors] from issuing a new request for information as to only the names and addresses of Amazon’s customers and general product information, assuming that [the state] destroys any detailed information that it currently possesses.”

Because Amazon has no offices or warehouses in North Carolina, it’s not required to collect the customary 5.75 percent sales tax on shipments, although tax collectors have¬†reminded residents that what’s known as a use tax applies on anything “purchased or received” through the mail. The dispute arose out of what had otherwise been a routine sales and use tax audit of Amazon by North Carolina’s tax agency.

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