Roger Fingas
The U.S. Federal Trade Commission has intervened in the bankruptcy court dispute over the sale of RadioShack customer data, spelling out conditions it feels are needed to protect personal privacy.
In a letter sent to Elise Frejka, the court-appointed privacy ombudsman in the matter, FTC Consumer Protection Director Jessica Rich pointed out that RadioShack originally collected the data with the promise that it wouldn't sell the data "to anyone at any time," according to Law360. Rich argued that sharing any of 21 categories of data without restrictions would break that guarantee, and represent a "deceptive or unfair practice" under Section 5 of the FTC Act.
Recommendations included that the court not sell the data as a separate asset, that a buyer be in "substantially the same lines of business" as RadioShack, and that the buyer agree to follow the policies RadioShack originally had when the data was collected. Any changes would require explicit consent from consumers.
Alternately, however, Rich said that the FTC would accept RadioShack obtaining consent from customers before transferring data, and deleting listings for anyone who opts out.
The proposed terms are similar to those agreed on by Toysmart.com, a bankrupted online toy store that the FTC sued in 2000 for violating Section 5. Much like RadioShack, Toysmart originally told customers that it wouldn't share data with third parties.
The letter puts the FTC on the side of factions like AT&T and Apple, which have objected to sharing consumer data involving their products. Last week, the RadioShack data was won in an auction bid by hedge fund Standard General, which also picked up other intellectual property and 1,700 stores. The bid is subject to court approval however, and privacy arguments may well force changes.
Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
6 Comments
Why was intervention by the FTC necessary? Did Radio Shack claim the previous Apple agreement was invalid? This action seems unwarranted and unusual.
Why was intervention by the FTC necessary? Did Radio Shack claim the previous Apple agreement was invalid? This action seems unwarranted and unusual.
Ahh? how so? I think your confused. Radio Shack was actioning off data they agreed not to sell as part of the contract with Apple and AT&T and others .. Thats a Duh? FTC's job is to protect consumers and agreements like this.. This is exactly what the FTC is supposed to do.. it's their job.
Unusual? They quoted another instance where the FTC had to do the exact same thing to protect consumer and other interests in 2000.. Did you read the article or just read the title?
Why was intervention by the FTC necessary? Did Radio Shack claim the previous Apple agreement was invalid? This action seems unwarranted and unusual.
Two reasons for clarification:
1. The purchase price was no doubt agreed upon to include some amount of customer data. This may result in renegotiations.
2. The new owners would be in a position to challenge whether they would be required to uphold the same policies as their predecessor. Generally, they wouldn't have to.
This "intervention" aligns the expectations of all parties.
[quote name="SpamSandwich" url="/t/186333/ftc-sides-with-apple-other-parties-concerned-with-privacy-of-radioshack-customer-data#post_2725020"]Why was intervention by the FTC necessary? Did Radio Shack claim the previous Apple agreement was invalid? This action seems unwarranted and unusual.[/quote] They've done so in similar circumstances before with Toysmart and Borders bankruptcies coming to mind. There was also intervention when XY Magazine bellied up. This also came up a few days ago. http://forums.appleinsider.com/t/186261/apple-intervenes-in-radio-shack-sale-in-effort-to-protect-customer-data#post_2723350
[quote name="SpamSandwich" url="/t/186333/ftc-sides-with-apple-other-parties-concerned-with-privacy-of-radioshack-customer-data#post_2725020"]Why was intervention by the FTC necessary? Did Radio Shack claim the previous Apple agreement was invalid? This action seems unwarranted and unusual.[/quote] Only if you don't follow this sort of thing. There are many instances of corporations with personal data acting against the best interests of their customers. I'm sure you can find many if you look. Here's a particularly egregious one: http://blogs.edweek.org/edweek/marketplacek12/2014/05/ftc_acts_to_protect_student_data_in_proposed_ed-tech_bankruptcy_sale.html