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California court allows online stores to continue to get personal data

SAN FRANCISCO — A narrowly divided state Supreme Court ruled Monday that Apple Inc. and other online retailers can continue to require California customers making purchases with credit cards to provide personal information to combat fraud.

An Apple customer sued the Cupertino-based company in 2011 after he was required to submit his home address and phone number when using a credit card to purchase music. The lawsuit alleged that Apple violated a two-decade old California state law prohibiting traditional "brick-and-mortar" retailers from demanding such personal information to complete a credit card transaction.

The 4-3 ruling said that law doesn't apply to online companies because they need the data to combat identity theft and credit card fraud. They are unable to require photo identification during credit card transactions, which traditional retailers are permitted to do.

"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," Justice Goodwin Liu wrote for the majority court.

Liu said state lawmakers were concerned only with brick-and-mortar retailers unnecessarily requiring personal information during credit card transactions when they adopted the law in 1990 when no one — even Apple's legendary founder Steve Jobs — envisioned the explosive growth of online commerce.


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