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August 5, 1999
Web posted at: 4:19 p.m. EDT (2019 GMT)

by Elizabeth Wasserman

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WASHINGTON (IDG) -- The House of Representatives voted 310 to 112 Tuesday in favor of a measure that would curb alcohol sales over the Internet by allowing state authorities to prosecute companies that violate their liquor statutes from other states.

The measure, which had been widely expected to pass, also included a provision to shield ISPs from lawsuits involving those Internet businesses that violate state liquor laws.

The hotly debated issue is part of a long-running fight between liquor wholesalers and independent companies that sell directly to consumers via catalogs, telephone or the Internet. But the wholesaling lobby won out, convincing a majority of members to close a loophole that currently prevents state law-enforcement authorities from prosecuting out-of-state companies that illegally ship alcohol to minors, people in so-called "dry" counties, or in violation of state laws.

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Opponents to the bill, which include most of the 2,000 small wineries in the U.S. that shop their wares over the Internet, said it could effectively stifle electronic commerce and lead states to tax alcohol sold online.

During debate on the bill Tuesday, the House unanimously supported an amendment offered by Reps. Bob Goodlatte (R-Va.), Christopher Cox (R-Calif.) and John Conyers (D-Mich.) that would limit the liability of ISPs when states pursue violators in federal court. The measure also states that local authorities cannot impose new alcohol taxes; such taxes would violate last year's Internet Tax Freedom Act, which imposed a three-year moratorium on new taxes on online goods and services.

Discussion of the bill was prolonged when Rep. Zoe Lofgren (D-Calif.), supported by some other Democrats, tried to add amendments that would have extended the reach of the bill to include interstate firearm sales. Those amendments were ruled to be unrelated to the alcohol bill, and were not debated.