Apple (NASDAQ:AAPL) and other Internet-based sellers of music and programs can ask for personal information, such as addresses and phone numbers, from users, according to a ruling by the California Supreme Court. The court, in a 4 to 3 ruling on Monday, said these companies were not covered by a 22-year-old consumer law that stops businesses from collecting such information.
That law, the Song-Beverly Credit Card Act, prevents businesses in California from collecting information as a condition of accepting credit card payments. However, according to the court, Apple and other Internet retailers don’t have the same safeguards against fraud as traditional stores and hence need this information for verification purposes.
“While it is clear that the Legislature enacted the Credit Card Act to protect consumer privacy, it is also clear that the Legislature did not intend to achieve privacy protection without regard to exposing consumers and retailers to undue risk of fraud,” Justice Goodwin Liu wrote. “Unlike a brick-and-mortar retailer, an online retailer cannot visually inspect the credit card, the signature on the back of the card, or the customer’s photo identification.”