Evan Schuman's StorefrontBacktalk

“Having thoroughly examined [the law’s] text, purpose, and history, we are unable to find the clarity of legislative intent or consistency with the statutory scheme necessary to conclude that the Legislature in 1990 intended to bring the enormous yet unforeseen advent of online commerce involving electronically downloadable products—and the novel challenges for privacy protection and fraud prevention that such commerce presents—within the coverage of the Credit Card Act,” the court wrote. “In light of our holding today, the Legislature may wish to revisit the issue of consumer privacy and fraud prevention in online credit card transactions, just as it revisited the use of Zip codes in the wake of our 2011 decision in Pineda. We cast no doubt on [plaintiff’s] claim that protecting consumer privacy in online transactions is an important policy goal, nor do we suggest that combating fraud is as important or more important than protecting privacy. We express no view on this significant issue of public policy. Our role is to determine what the Legislature intended by the statute it enacted. Here the statutory scheme, considered as a whole, reveals that the Legislature intended to safeguard consumer privacy while also protecting retailers and consumers against fraud. This accommodation of interests struck by the Legislature would not be achieved if [the law] were read to apply to online transactions involving electronically downloadable products. Because we cannot make a square peg fit a round hole, we must conclude that online transactions involving electronically downloadable products fall outside the coverage of the statute.”

A dissent was filed by Justice Joyce Kennard, who questioned the logic of the majority when it said that the legislature’s not mentioning online merchants meant that they should be excluded from that law.

“The majority states that when the Legislature wants to regulate online businesses, it must do so expressly, as it did in the California Online Privacy Protection Act of 2003,” Kennard wrote. “Under that reasoning, the civil rights protections of the Unruh Civil Rights Act would not apply to online businesses because that act does not refer to those businesses expressly. Similarly, under the majority’s reasoning, the Commercial Code would not apply to online businesses because the code does not mention those businesses expressly.”

Although the law of the land in California is important, it is typically trumped by E-Commerce’s law of supply and demand. E-tailers, especially those a lot smaller than Amazon, have a practical limitation of seeking private information: shopper toleration. Ask too much, and some consumers simply won’t bother.

Where that needle on the dial of consumer privacy intrusion tolerance should be set is up for debate. It will depend on the type of product, the demographics and inclinations of the shopper, and how invasive the information requests are.

Then there’s the power of the majority, which simply means that procedures and requests that become commonly used by most of the major chains and sites will be tolerated much more than those of an outlier seeking much more than its rivals.

In short, there are laws of legislation from courts and laws of what is considered acceptable from shoppers. Regardless of where that needle falls, it’s now going to be pushed sharply away from the privacy protection side. Celebrate your CRM windfall, marketers, while you can.