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Failed Dot-Coms Selling Private Info

Posted by emmett on from the why-lookee-here dept.

goingware writes: "This article at CNet describes how troubled Internet companies are selling off customer data in an effort to pay off creditors or keep themselves afloat, in violation of stated privacy policies. Among the sites that are doing this are Boo.com and Toysmart. These companies were Truste approved sites before their failure. Note that when a company is bankrupt, its assets are divided up and sold off according to what the court orders, and may not have much to do with what the company tried to promise. I also noticed when checking out the articles that CNet uses doubleclick so you may want to browse the articles with cookies off."

3 of 129 comments (clear)

  1. If you extend the situation ... by dustpuppy · · Score: 5
    does this mean that:

    if your doctor's clinic folded, he could sell your patient info?

    if a telco folded, could they sell your phone records?

    if a bank collapsed, could they sell your financial transaction history?

    if your ISP folded, could they sell your surfing habits?

    1. Re:If you extend the situation ... by Anonymous Coward · · Score: 5

      I worked for a bank for almost 4 years, and I have news for you: Banks sell your information all the time.

      Your name, address, and any spending habits that they can accumulate are sold to other companies every day. You have to go to your bank and specify in writing that you do not wish for them to sell your information to make them stop. Banks don't need to go out of business to sell your information, because to the them it's just another revenue stream.

  2. Lawyer: who owns what by hawk · · Score: 5

    I am a lawyer, but this is not legal advice. If you need legal advice, contact an attorney licensed in your jurisdiction.

    There are a number of factors at play here. The bottom line will be that, for the most part this data cannot be sold.

    Forming a contract is *very* easy. Put up a message that says, "give me this information, and I promise not to reveal it," and you have an offer. Anyone providing the information accepts the contract, and the recipient is contractually bound not to reveal it. Selling it would be a breach.

    Given a breach, the consumers would be entitled to "specific performance," a court order enforcing the terms of the contract.

    But then comes bankruptcy, which can do all kinds of strange things to contracts, setting aside large parts of the contract, which *might* allow a sale--but this introduces a new catch, namely that every single person who provided a name becomes a creditor with rights in the bankruptcy.

    There's a couple of ways that this could play out. It certainly isn't crystal clear that privacy wins, but my money is on privacy. Given that the expectation of continued privacy covered the gathering of the information, the potential sale of that information could not have been looked upon as an asset by the other creditors. THere's a couple of ways to reach this, the simplest being the contract.

    Sale of the *entire* company might be a different matter. If thugs.com branches out from lockpicks to handgus, would they have been allowed to use the information they gathered to promote their new product line? If so, the entire company can probably be sold, and the new parent company can likely use the information in a similar manner. If not, the new parent company would be similarly barred from the information.

    hawk, esq.