Apple intervenes in Radio Shack sale in effort to protect customer data
Neil HughesA shuttered RadioShack store, via Ted Eytan.
Bidding for the RadioShack brand and customer data has ended, but not before Apple weighed in on the proceedings, saying that information collected during the sale of its own products should be left out of the deal.
The hedge fund Standard General was the top bidder with $26.2 million for RadioShack's brand name and customer data. The same firm bought out Radio Shack's 1,700 store leases in March, as noted by Bloomberg.
But as the bidding process was underway in a Delaware bankruptcy court, Apple joined the proceedings with a filing of its own. Specifically, the iPhone maker argued that its agreements with RadioShack prevent customer data obtained from those buying Apple products from being resold.
In order to gain an Apple reseller agreement, RadioShack allegedly waived any rights to the data of customers who bought Apple products, as detailed by Law360.
"In order to protect its customers' personal information, Apple oversees the collection and use of customer information collected by its retail partners, including RadioShack," Apple's filing with the court reads. "The reseller agreement between Apple and RadioShack protects information collected by RadioShack regarding purchasers of Apple products and prohibits the proposed sale of such information."
Also joining was AT&T, who said that RadioShack "seemingly intends" to sell information obtained during the sale of AT&T devices.
The judge overseeing the case must still approve Standard General's bid for RadioShack, as well as the exchange of accompanying customer data, including some 67 million physical addresses and 8.5 million email addresses. A hearing has been set for May 20.
U.S. Bankruptcy Judge Brendan L. Shannon did say last month that he would not approve the sale of any customer data he finds to be impermissible.
The demise of RadioShack brings to an end a store that once catered to technology enthusiasts and hobbyists with hard-to-find gadgets, components and accessories. But as the retail space changed, and enthusiasts increasingly went online to buy products at inexpensive prices, RadioShack attempted to adapt and become primarily a smartphone reseller.
That plan failed, however, leaving RadioShack with two straight years of losses and headed to bankruptcy court. Trading of the Texas-based company's stock was suspended on the New York Stock Exchange in February.
Malcolm Owen
Charles Martin
Mike Wuerthele
Chip Loder
William Gallagher
75 Comments
Now that's interesting. Radio Shack waived the rights to Apple customers' data...I am not familiar with those kinds of agreements. Is this uncommon?
And that, my friends, is why it's so important to use Apple Pay or cash only at retail establishments.
It's ironic that the most annoying part of any Radio Shack transaction (giving them your credit card, phone number and zip code when you buy a $3 battery at their store) is now the most valuable part of their entire bankrupt retail chain.
[quote name="Suddenly Newton" url="/t/186261/apple-intervenes-in-radio-shack-sale-in-effort-to-protect-customer-data#post_2723315"]Now that's interesting. Radio Shack waived the rights to Apple customers' data...I am not familiar with those kinds of agreements. Is this uncommon?[/quote] yes it very uncommon that a company can bar another company from data they collect on their customers. But Apple has the power to negotiate these kinds of deals. Generally speaking once you sell your product in to Distribution channel and one could argue that Radio Shack along with Best Buy and such are distributors the company putting their products in those channels give up all rights to set price and control over who the customers are. This shows you how committed apple is to protection peoples information. Google would probably do the same thing, but for different reasons, mainly they do not want others making money off their informations it about profits for Google and other companies. On a different note, my local Radio Shack happens to be a franchise store and the owners said they all did very well and they are hoping to stay in business and they are looking to buy products directly if all possible so they can stay in business.
[quote name="Suddenly Newton" url="/t/186261/apple-intervenes-in-radio-shack-sale-in-effort-to-protect-customer-data#post_2723315"]Now that's interesting. Radio Shack waived the rights to Apple customers' data...I am not familiar with those kinds of agreements. Is this uncommon?[/quote] If the original agreement stipulated that identifiable customer information could not be sold to a 3rd party I'd guess it's standard boilerplate language to say the same terms would apply in the event of a change in ownership. ATT apparently has the same in their re-sellers contract too according to the article.