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Legal Approaches to Regulating Internet Tobacco Sales

Tobacco control has taken various forms over the years: smoking bans have been instituted; smoking cessation programs have been offered; and programs targeting youth access to cigarettes have been implemented. Myriad education programs provide information about the dangers of tobacco and legislatures’ imposition of excise taxes on tobacco provides economic disincentives to smoking. In recent years, litigation has challenged tobacco manufacturers directly. Now, another major obstacle to fighting tobacco use has emerged-Internet tobacco sales to youth. Tobacco addiction is often referred to as a childhood disease. More than four out of five smokers become addicted before reaching eighteen years of age. Well over half of high school and middle school smokers report they tried to quit at least once but failed. The objective to keep tobacco out of the hands of youth is being frustrated by readily accessible Internet tobacco sales. Purchasing tobacco over the Internet provides anonymity for the purchaser. Cyberspace tobacco purchases are perceived as risk-free. Similar to vending machines, there is no face-to-face contact for Internet purchasers. Many Internet tobacco vendors purport to implement some form of customer age verification process, but they are nominal efforts. Approximately 65 percent of domestic tobacco sales websites have an age verification protocol that consists of either typing in a birth date or clicking a button that says, “Yes, I’m at least 18 years of age.” Roughly 9 percent of the websites ask the purchaser to fax in a picture ID, and only 6 percent check the purchaser’s identification when the tobacco is delivered. To further illustrate the ease with which youth can purchase tobacco online, various compliance checks (similar to sting operations using youth) have been performed. In these compliance checks, youth were able to successfully obtain tobacco from an online vendor using money orders 89 percent of the time. Youth using credit cards had an even higher success rate, about 94 percent. And even if credit card purchases are not 100 percent effective, many online tobacco vendors are beginning to accept PayPal, which is comparable to an online credit card. It makes it simple for kids to set up accounts. When the tobacco was delivered in these compliance check studies, the couriers often just left the tobacco at the door, with no personal interaction. In addition to allowing easy and anonymous tobacco sales to youth, Internet vendors also undermine tobacco restrictions by avoiding excise taxes. Numerous studies show that an increase in the excise tax on tobacco results in a decrease in tobacco consumption. Empirically, studies indicate that a 10 percent increase in tobacco prices results in a 5 percent decrease in adult usage rates and a 7 percent decrease in tobacco consumption among youth under the age of eighteen. As a result, many states tax cigarettes heavily. In some states, it is more than one dollar per pack. In addition to deterring tobacco consumption, tobacco taxes also provide an important revenue source, some of which is used in anti-tobacco campaigns. Tobacco manufacturers argue that any further increases in tobacco taxes are useless because people can simply turn to the Internet for untaxed tobacco products. This argument is false. To illustrate what the tobacco industry hopes to achieve with this argument we need only look to