Venable’s John F. Cooney on Amazon.com vs. New York State Department of Taxation and Finance
TM: Does a click on a banner ad constitute a sale?
JC: To my way of thinking, the clickthrough is no different than viewing an ad on TV and viewing an ad on a billboard, where you see something that you want to buy and say I want to contact them. In the old days, you dialed up their 800 number and you went to Lands' End and you said, "I'd like to buy three of those shirts," and they filled the order remotely and sent it to you. Under the Quill case, if that was the only contact that Lands' End had with the state, then Lands' End didn't have to collect the use tax. And to me, it's much the same thing that if you look at a banner ad and say I want to go to Amazon and explore, you know, court books that they have this week, you still have to click through then to something else.
And it can't be constitutionally significant that in the Lands' End model, you had to dial a 10-digit phone number to get there; with the banner ad on a website, all you have to do is click once. The individual has to take some kind of implementing step to go to the [company that's] actually advertising the product and actually can make the sale. The affiliate is just like the publisher, like Time magazine, that carries an ad for Lands' End, in the sense that they don't offer the products themselves, they don't handle the money, they're not involved in the actual sale transaction, they're not involved in fulfilling the order.
TM: What does a loss for Amazon mean to marketers?
JC: A loss for Amazon—and this issue is likely to be appealed to the U.S. Supreme Court at the end of the day, one way or another, simply because it is a significant issue—the net effect of this would be to chill very substantially, if not completely end, the ability of businesses to rely on the affiliate marketing model. It would certainly require major changes.