FTC Seeks Battle With Toysmart

wrenling writes: "Toysmart promised to never share their customer's data. They lied. They are seeking to sell their customer databases. The FTC voted today to begin a court battle with Toysmart to block them from doing so. CNN has more details in a CNNfn article."

Comments

Quick question...

[Animol]

Assuming that the FTC didn't enter into a court battle, couldn't we (the users) enter into a class-action lawsuit against Toysmart? I mean, getting cash cost for damages, etc., above and beyond what they were paid for the database would send out a better message, IMHO. I would think that to be a better deterrent.

Re:Quick question...

[furiousgeorge]

>couldn't we (the users) enter into a class-
>action lawsuit against Toysmart?

Sure you could, but remember this is part of their *bankruptcy* proceedings. They were trying to do it because they have no money!

Only thing a class action suit would do would make more money for some lawyers.

You can't get blood from a stone.

Your info

[KeyShark]

If you don't want your info given out to other companies don't give it to anyone in the first place. Anytime I submit my info I assume that it's going to be sold to other companies.

Re:Your info

[beagle]

If you don't want your info given out to other companies don't give it to anyone in the first place. Anytime I submit my info I assume that it's going to be sold to other companies.

I'm all about that, but this is getting impossible in this increasingly connected world. I was off the junkmail...er...DMA...lists for nearly a year until I moved. I was assured - several times, mind you - by US Postal Service staff that my new address would not be bought or sold.

Just think of all the people who have your info already: creditors (revolving credit), other creditors such as the phone company, power company, cellular service provider, cable company, magazine producers, banks, your ISP, InterNIC - the list is so long I can't name them all.

You have to tell every one of these companies that you don't want them to sell or rent your name. Companies are getting around that, however. They still share your information - but this time it's with "business partners." Look - don't fucking give my information to anyone without explicitly asking me first.

And even if you do tell everyone to not sell your info, you'll probably still get junkmail and telemarketing calls - especially if you have a legitimate address in your InterNIC record. There are some jerks who poll InterNIC WHOIS records for addresses to add to junkmail lists. Also if you try to sell a car in a newspaper you'll get calls from people all over the country who use computers to poll online classifieds and -- illegally, mind you (see Junkbusters regarding the TCPA) -- use automated systems to call any phone numbers listed. I know - I got over 10 calls -- ALL automated -- from businesses trying to get me to pay them 40 bucks to have my vehicle ad blasted all over creation.

I'm sure it's no wonder to you that I'm all about the FTC going after these pricks.

Re:Your info

[mOdQuArK!]

Even if they promised, in no uncertain terms, not to sell your info?

If they break a straightforward promise like that, what other things are they going to be dishonest about?

Too bad the corporate structure prevents executives, managers (AND SHAREHOLDERS) from doing a little jailtime for violating the law.

Three Cheers for the FTC

[pianoman113]

It is about time the government did its job. I am not a fan of Disney to begin with (owners of Toysmart) and this make me like them even less. Even if they had no direct influence in this, they certainly knew it was going to happen. Stick it to them FTC!

toysmart and others

[tweek]

I actually read a similar article about this initially at news.com talking about companies doing ths all the time when they go bankrupt. Of all the hardware and everything they have (as much as an internet company CAN have) customer databases sell for the most and oft times get them out of debt the most. It's good to see a government organization standing up for the people for once.

For the attentive (like me) check news.com from Saturday, I believe, and see which OTHER companies are currently auctioning off customer databases. You may have done business with them at some point.

Excercise your rights or loose them.

Re:toysmart and others

[mblase]

The news.com article you were looking for is here.

Re:toysmart and others

[tweek]

I was actually trying to be clever but i guess it didn't work out. =)

How Binding?

[hodeleri]

Just how binding was Toysmart's promise? Was it a "Above subject to change without notice" or was there an explicit contract between user and Toysmart?

In the former case I doubt that anything will happen, but it will be very exciting if somebody goes down because of this.

--
Eric is chisled like a Greek Godess

Re:How Binding?

[mindstrm]

In the case of consumers, very binding.
Even if there is no specific contract,if the company asked for the information, and was publicly stating that it would never be sold to anyone else, that is all that is needed.

The consumer believes it, which is what matters.

Re:How Binding?

[anticypher]

By posting a privacy policy on the web site, the company has entered into a legally binding contract with anyone who uses the site. It is the same with a bricks and mortar food shop putting up "sale" signs in their windows or in adverts in the paper. If they publish a price, they are bound to honor it. Only the occasional misprint is allowed, and most shops will honor misprints rather than risk their business license.

So glad to hear some sane news coming from out of America for a change.

the AC

Re:How Binding?

[mclearn]

This comes from the Toysmart privacy page:

Personal information voluntarily submitted by visitors to our site, such as name, address, billing information and shopping preferences, is never shared with a third party. All information obtained by toysmart.com is used only to personalize your experience online.

Now from what it appears -- the Toysmart company is going out of business and needs a buyer. According to the privacy policy, they will not sell their data to a THIRD party. However, if they sell the company (data and all), then is the new company owner a third party anmyore? I don't think so (but IANAL). In my view, they are safe as long as they use the data as hey state and sell the data along with the company to the new owners.

Re:How Binding?

[lizrd]

From toysmart.com the most relevant part of their privacy policy. Seems pretty airtight on the part of the customer to me. For the full text go here.
Our promise At toysmart.com, we take great pride in our relationships with our customers and pledge to maintain your privacy while visiting our site. Personal information voluntarily submitted by visitors to our site, such as name, address, billing information and shopping preferences, is never shared with a third party. All information obtained by toysmart.com is used only to personalize your experience online. This information is received via the following areas of our site: My toysmart and the Gift Center. When you place additional orders, our site will update your order history, which you can view in My toysmart. If you sign up for the gift registry, information you submit will be added to your personal profile. Other than these two instances, the information that you provide us is not supplemented in any way.

Re:How Binding?

[mtphoto]

IANAL, but the privacy statement seems to state that your info will not be sold to a third party. The trick is that if the entire company is sold the a third party, that third party is now a first party. They have access to the list (and possibly without being held by the privacy policy). That's what the c|net article was getting at if my memory serves me. It's legal under the letter of the law, and I'm glad to see the FTC deciding to uphold the spirit also.

Re:How Binding?

[Steve Hamlin]

I'm not sure about in the UK, but in the US general advertisments are NOT contracts.

Newspapers adverts are solicitations of offers, that is, asking you to come in and offer them the sale price for the item.

If they don't want to sell it to you at the price you just offered, they don't have to. Nothing wrong there.

Several exceptions to this are specific sales to specific customers(e.g. $10.00 printer to the first customer in our Dallas, Texas store who can answer this trivia question:...) and bait-and-switch regulations (administered by either the U.S. Federal Trade Commission or similar state agencies, and violating statues, but NOT breaching private contracts).

As for privacy policies, I'm not sure. Depending on the case law (of which I'm not an expert), there might or might not be a contract. Problem: what consideration (normally, but not necessarily, $$$) did you give? Perhaps your demographic info/email address/etc. Perhaps not enough.

If not a breach of contract, you can normally argue for promissory estoppel (detrimental reliance). Promise made that you relied on to your detriment. In this case, "your detriment" might be hard to prove. Since you were willing to give your email address to ToySmart (and perhaps shown to have been spread by you all over the internet), then how have you been harmed? No harm, no foul.

Of course, these are all problems with private actions against ToySmart. In cases such as these, it is nice to have something like the FTC fighting on your side.

Re:How Binding?

[onyxruby]

I know here in Minnesota several stores have gotten into legal trouble for advertising "discprencies". The one in particular that comes to mind is good old best buy. They advertised that nobody could beat their prices on any given model. Truth of the matter was they were right. The sticking point was the model #. They were big enough that they were able to get their own custom models from Sony etc. This along with several other similiar tactics got them sued by our Attorney General. They tried claiming "truth in advertising" and it did not hold up in court.

This is retail however, and I don't know how much carryover there would be. I know phone companies have gotten in trouble before for similiar things. There is a certain standard that things have to written to. You aren't allowed to try and claim everybody can consult a lawyer.

It goes with the territory

[mblase]

I think it should be perfectly possible, legal, and reasonable to sell the personal data -- provided that it stays with the web site. In other words, anyone taking that personal data must use it in conjunction with the URL "toysmart.com" and whatever website they put up in its place.

a rock and a hard place

[wishus]

Don't moderate this as "off topic" just yet - allow me to get around to my point.

I am a libertarian - so don't accuse me of libertarian bashing, because that's not what this is about. And when I say "libertarian," think "political party", not "crypto-anarchist". Do that for the sake of this article, whatever you really believe.

There, now that is out of the way.

So, as a libertarian, I have a problem here.. An inner conflict, if you will. One one hand, I believe (like a good libertarian should) that there should be less government. That the government should keep its hands out of just about everything. But on the otherhand, without the government, toysmart can violate my rights. Microsoft can crush my company. And I cannot stop them.

Of course, we can talk about standing up for your beliefs, and organizing this and that, etc. etc., but right now, toysmart is all set to disclose private information trusted to them - after they said they wouldn't.. and it looks like the FTC is the only thing with enough force to stop them.

So, knowing there are a lot more involved libertarians out there, what is the answer in cases like these - where the government stands between us and toysmart, or microsoft...

What is a libertarian supposed to think about it?

wish
---

Re:a rock and a hard place

[(void*)]

So, as a libertarian, I have a problem here.. An inner conflict, if you will. One one hand, I believe (like a good libertarian should) that there should be less government. That the government should keep its hands out of just about everything. But on the otherhand, without the government, toysmart can violate my rights. Microsoft can crush my company. And I cannot stop them.

It's not so hard. Stop thinking that the government is evil. The government does have its uses, and one good use of this to protect and defend the public good. The ideal government is one that expresses the common will of the people.

Of course, the actuality and how it departs from the ideal should be examined with a keen eye.

Re:a rock and a hard place

[MindStalker]

Just a question, what is the libertarian stance on a government holding a military, so that it can protect its country from outside invadors.

I would think whatever stance libertarians have on that issue should be about the same. Because nowadays corperations are fairly independent of any one nation. Think of them almost each as a small nation trading with our nation. And ask yourself what our foreign policy should be for involvment which such nations that abuse thier power they gain through such trading????

Re:a rock and a hard place

[Golias]

As a libertarian (note the small "l", I am not a member of the Libertarian Party), I believe that the Federal government should be smaller than it is. We should stop the "war on drugs" which has brutalized random people without doing any real good; we should scale back our awesome military forces from countries where it does not aid our national interest and inspires terrorists to hate us; we should stop trying to dicker with the price of milk and let dairy farmers sell it for what the market says it is worth.

Should we do all this out of some mad hatred for authority? No.

The reason we want the government to scale back from so much is because it should stay on-task with the few things it should be doing:

1. Protect our lives from violence
2. Protect our rights
3. Promote the general welfare (some libertarians forget this one)
4. Uphold contracts
5. Enforce the law

I don't know all of the facts of the Toysmart case, but it looks like a pretty clear case of breach of contract. See item 4 on my list.

Re:a rock and a hard place

[Steve B]

What is a libertarian supposed to think about it?

This is a straw man. Contract enforcement is one of the few government functions generally accepted as proper by libertarians. Toysmart promised not to sell their data -- if they try to do it anyway, nail 'em.
/.

Re:a rock and a hard place

[Golias]

An American corporation is a group of Americans (and some foreign investors) doing business under one name. When you do business in America, you are subject to American law. It's that simple. No need for hyperbole about Target Corp. or RJR Nabisco being some kind of foreign power. They are not the ones with the guns.

I know it is easy to get worked up about the evils of the "corporatists" after reading a few Katz articles, but if the Ma Bell break-up and the expected fate of Microsoft tell us anything, it is that we are still a nation of laws (when the system works).

Re:a rock and a hard place

[Golias]

Witness the '80s Republican stance of "less government" while raising the national debt and trippling the size of the US government.

The Republicans did not control the budget in the 80's. Democrats controlled both houses of Congress for most of the Reagan/Bush era, and only congress has the power to write spending proposals into law.

This is not to say that Reagan did not fail to live up to his rhetoric. The '86 budget deal was all his idea, and it was a major step away from small government.

My point is that you should look to the Congress if you want somebody to blame for the balooning budgets of the 80's. For every MX missile Reagan and the Pentagon wanted, Ted Kennedy appended 20 Minuteman missiles that were built in his state; and the budgets for Health and Human Servies, the Department of Education, and several other social-program oriented federal branches actually grew faster than the military, against the wishes of the Gipper. They were Tip O'Niel's budgets, not Reagan's.

Re:a rock and a hard place

[Wellspring]

So, as a libertarian, I have a problem here.. An inner conflict, if you will. One one hand, I believe (like a good libertarian should) that there should be less government. That the government should keep its hands out of just about everything. But on the otherhand, without the government, toysmart can violate my rights. Microsoft can crush my company. And I cannot stop them.

That's the eternal question. Government can be a great force to protect those who it represents. But it can also easily trample on people's rights. Right now, libertarians and republicans believe that government is too big. Democrats and Green Party Members think that it isn't big enough.

The LP wants to have a government which is pared almost completely away-- ie no foreign policy other than national defense, no consumer protection laws, etc. An idea LP consists of the police, the military (but they only deal with threats once they are at our borders), and the judiciary.

Then you get something like this. Does this violate their privacy policy? Is this an assurance or a contract? I don't know, but I know it is a bad thing-- worse for the .com's which survive the current storm, and who have to deal with a suddenly more wary public. Many companies even used deceptive language to sell their data.

I don't know what the libertarians will say, other than perhaps "if noone buys from .coms, they'll have to enforce their privacy rules". It hasn't worked so far, and won't stop companies going bankrupt, but maybe give it time.

Of course, the Republicans have a more moderate view. They feel that there is a role for government in things like privacy, but that it is too big and powerful right now. You don't hear about it on the TV or in poly sci class, because they want you to think that Republicans Are Evil, but there is a very large number of republicans who adhere to libertarian principles but do see a need for government sometimes.

No offense to the libertarians here (i think they're the second best party in the US), but I think that being ideologically absolute isn't always such a great idea. Government does have a role, though the LP is right to think that it is way out of control. In EE class, they always used to say that the world is analog. I think they were right about that in more ways than one.

Is it a contract?

[Gorbie]

The heart of the issue here is whether or not the company promising its customers that such information will remain private is a binding and legal contract.

While IANAL, I do know that in Massachusetts there are provisions to make even oral contracts binding. Oral contracts can be difficult to prove, but can be used as a legal agreement. This is a Massachusetts based company, but it is unclear whether this type of behavior would be handled under state law. If so toysmart's efforts have a really good chance of failing. Otherwise, I can give no opinion.

While there is a question of law at hand, I am more concerned with the question of corporate ethics in web-land, especially when it comes to consumer privacy. When someone gives information to a site and specifically request that the information be kept secret, there is a good faith agreement that in exchange for the business they conduct, their wishes will be adhered to. In this case, there is no more business to be conducted. What happens to good faith when a web company goes belly-up? This could set a veeeery interesting precedent.

Re:Hooray for the government

[Golias]

That might be the anarchist response. Libertarians believe that enforcing contracts and laws is one of the government's few legitimate roles.

This is definately a case of a company breaking an agreement, which warrents civil action at the least, and possibly criminal liability.

IANAL, IAAl (I am not a lawyer, I am a libertarian).

It not an asset, it's a liability!

[(void*)]

Yes, that is what the FTC should try to do. They should try to establish a precendent that such lists of customer data are not assets. They are a liability and should be disposed of entirely. Any disks storoing the information should be wiped by a reputable company. Any hard copies shredded. The penalty for leaking of this information to any partty would be the the payment of say - $50 - to each and everyone on the list, by default.

This is the way to stem and break the trade in customer data.

Re:It not an asset, it's a liability!

[TheTomcat]

The penalty for leaking of this information to any partty would be the the payment of say - $50

I'm assuming you just pulled that number ($50) out of your head, and I'm not trying to call you on it, here, but how would we put a price on this?

To my next-door neighbor, his personal information might not be worth anything, maybe he LIKES getting tons of junk mail, and has fun forwarding spam to his 'buddy list.' Perhaps to my other neighbor, personal information would be invaluable.

I know that we've put a price on many invaluable commodities already, but where would we even start on this?

Re:It not an asset, it's a liability!

[(void*)]

I admit there is problem with setting the price. But keep in mind that this is just a penalty, a fine if you like. It does not establish the worth of the data, just like a parking violation fine is not the "worth" of the parking space. This amount is in addition to whatever individual customers may do - sue them for privacy invasion or something. So the company is faced with two choices - shred the data, or if not, pay up. The choice is clear.

Everyone's a libertarian...

[isaac]

...until they are themselves faced with the need for consumer protection.

Enforcing contract law is a vital role of the government. Without it, there's no recourse when one doesn't get what one pays for (in this case, I consider Toysmart's privacy policy to be a part of the terms of sale).

-Isaac

Re:Everyone's a libertarian...

[/]

A conservative is a liberal who's been mugged. A liberal is a conservative who's been arrested. Both become libertarians, come April 15.

Re:Everyone's a libertarian...

[Golias]

Why do people who don't seem to know the difference between libertarians and anarchists keep getting modded up as insightful around here?

A libertarian belives that individual liberty is paramount to the existance of a free state, and that government must be established to protect the rights of the individual. That includes enforcing contracts. I defy you to find one leader within the LP, or one prominent libertarian writer who thinks contracts should not be upheld.

An anarchist believes in the lack of controlling authority, where each looks after his or her own rights.

You may want to re-read your old high school civics books. Start with Burke, Adam Smith, and Voltaire.

Re:Everyone's a libertarian...

[isaac]

A libertarian belives that individual liberty is paramount to the existance of a free state, and that government must be established to protect the rights of the individual. That includes enforcing contracts. I defy you to find one leader within the LP, or one prominent libertarian writer who thinks contracts should not be upheld.

That may be the policy of the Libertarian Party(TM), but I was responding to the original poster who's self-described "libertarian" beliefs presented him with a moral quandry.

I won't take you up on your challenge (re: LB leadership) because I believe you. I was using a rhetorical device to illustrate to the original poster that the notion that a government should uphold contract law is not necessarily incompatible with libertarian ideals.

FWIW, I agree with some (but not all) libertarian notions, and am a member of no political party.

-Isaac

Re:Everyone's a libertarian...

[Upsilon]

Thank you! It's about time somebody cleared this up. Libertarians are not anarchists. They believe in a minimal government, not no government. I think that something like enforcing contracts is definately a useful role of the government.

Now, personally I'm not a libertarian. I'm a registered independent, largely because I try not to confine myself to any specific philosophy or dogma and I believe in always trying to determine what the right solution for the problem at hand is. Still, I find I agree with a lot of the libertarian philosophy and I scored about 90% on their "Are you a libertarian?" test thinging, not that it's a scientifically accurate test or anything. Anyway, I think I had a point at some time, but I forgot what it is.

Anyway, the question which started this thread really bugs me. First of all, I don't think there is a conflict between libertarian ideals and enforcing contracts, but that's besides the point. If the original poster does feel there is such a conflict, then why is he a libertarian? Why subscribe to a party philosohpy you don't agree with? 'Cause /. told you to?

This get's into why I'm not a libertarian, despite the fact that I agree with 90% of what they say. I don't like dogma, I don't like canned solutions. Why can't people just think for themselves instead of being confined to a few predetermined options? There is no one magic solution for anything, let alone complex world issues. Take some time to actually evaluate different possibilities instead of just saying, "I'm a libertarian and this conflicts with libertarian ideals so I don't like it"!

Anyway, that's enough incoherent ranting for one day.

Of course, the notion of never letting yourself be influenced by dogma is, in of itself, a dogma.

Re:Everyone's a libertarian...

[Golias]

I wouldn't be too tough on the guy that started the thread. A lot of people who call themselves "libertarian" were initially drawn to the philosophy when something the governement did really p???ed them off. Like they say, the recent converts are always the biggest zealots.

Also, it sounded like he was just asking an honest question, where as many who responded to him were trying to characterize all libertarians as raving nutbags in the Michigan Millitia or something. It was their response that raised my hackles, not the original question.

Re:Everyone's a libertarian...

[Golias]

Sorry if I reacted more strongly than I should have, but the common mistake of equating libertarians with government-hating anarchists sometimes becomes like a Chinese water torture... it just gently hits you in the face, again and again and again. (And when somebody modded this common misconception up as "Insightful", it was the straw that broke the camel's back.)

"...let slip the dolls of war."

[ktakki]

FTC Seeks Battle with Toysmart

Let's see...

The Federal Trade Commission has a cadre of crack investigators backed up by masses of professional bureaucrats.

Toysmart has warehouses full of Sooper Soakers and a legion of G.I. Joes with Kung Fu Grip[tm].

My money's on Toysmart.

k.
--
"In spite of everything, I still believe that people
are really good at heart." - Anne Frank

You bankrupted us, now suffer the consequences.

[Pac]

So you tought that coming here and buying our crap merchandise ONCE, a miserable one time in your life was enough?

Look at what you acomplished, you moron! We are out of business now, thanks to you! Why haven't you come back? Why haven't you told your wife, your husband, your neighbours, your friends to come and buy from us? Why?

Know what, we will get even with you. Yes, just wait and see. We have you by the hand. We know where you live, we know your credicard number, we know your phone number.

We will go out and sell all this to highest bidder. No, I have a better idea yet. We will sell it to MEANEST bidder.

Your phone number will go to the worst direct marketeers in the country! Your address, to every church in your area. Your children's names will go directly to alt.sex.pedophilia.children.offer.themselves. Your wife's name we have already sent to a scort's online site. And your boss will be hearing about that sex toys you bought.

You made us suffer. Now taste our revenge. Next time you will thinking twice before failing to help an honest and good online store to trive.

Selling the Data, or the business?

[game-theory]

The article didn't make it very clear as to whether they want to sell the database of customer info, or if the database will change hands along with the rest of the company.

The former seems to be a bad idea; as stated previously, even if the FTC didn't step up to the plate, they'd be facing a pretty lengthy civil fight (probably class action) against everybody who registered with them.

The latter seems much more reasonable, and is what appears to be actually happening. This is certainly acceptable, I'd think. A corporation is an entity unto itself, and would retain ownership of the database regardless of who was pulling the strings behind the scene.

But, if the latter is really going on, why was it reported in such a provocative way (i.e., "This company is going to sell your information even though it promised not to!") instead of a more direct manner ("This company is going to change hands."). Seems like rabble rousing to me.

But, what do I know? ;).

Re:Selling the Data, or the business?

[Captain Constitution]

Either way, using that data for unethical purposes is expressly prohibited by United States law.

U.S. Code, Title 18, Section 1033 says: Whoever, by threats or force or by any threatening letter or communication, corruptly influences, obstructs, or impedes or endeavors corruptly to influence, obstruct, or impede the due and proper administration of the law under which any proceeding involving the business of insurance whose activities affect interstate commerce is pending before any insurance regulatory official or agency or any agent or examiner appointed by such official or agency to examine the affairs of a person engaged in the business of insurance whose activities affect interstate commerce, shall be fined as provided in this title or imprisoned not more than 10 years, or both.

I hardly consider this rabble rousing when our Constitutional rights are at stake. The changing of hands will result in a flurry of red tape at the end of which we can rest assured that the new owners of Toysmart will use their customer database for the corrupt purpose of selling this very personal information to telemarketers. However, customers can take recompense for damages incurred by Toysmart's policies.

From U.S. Code, Title 15 (Trade and Commerce), Chapter 8, Section 298: Suits by competitors, customers, or subsequent purchasers for injunctive relief; damages and costs Any competitor, customer, or competitor of a customer of any person in violation of section 294, 295, 296, or 297 of this title, or any subsequent purchaser of an article of merchandise which has been the subject of a violation of section 294, 295, 296, or 297 of this title, shall be entitled to injunctive relief restraining further violation of sections 294 to 300 of this title and may sue therefor in any district court of the United States in the district in which the defendant resides or has an agent, without respect to the amount in controversy, and shall recover damages and the cost of suit, including a reasonable attorney's fee.

This is a sad world

[Darkstorm]

You know what scares me the most? The fact that even if they somehow stayed afloat, most of the people out there would still buy from them. Its a sad fact that there are millions of morons out there that just don't know, or care what people are doing with their private information.

All the people who use major online companies for internet access are pretty used to spam from thier provider selling thier email address. They seem to accept this as normal and something that they deal with and think nothing of it. Look at all the "click to win" type sites. Where is all the money comming from to pay the winners? Why by the selling of the full info that you have to provide them to participate.

I find it depressing that the internet has formed a new form of revenue in the selling of personall information to be abused by marketing people. Telemarketers, spamers, ect. And the very sad thing is this is being done by the companies you are purchasing items from. It isn't enough you are buying from them, they also sell your info to make even more money.

Just thinking about all the uncarring people who will continue to use any company regardless of thier actions makes me sick.

Hint: If you are logged on to AOL and reading this you might fall into the catagory I mentiond

click-through and shrinkwrap licenses

[eln]

There is a parallel, in my view, between this and "click-through" and "shrinkwrap" licensing schemes.

From a common sense standpoint, the FTC has to win this battle. If they don't, this would not only make privacy policies essentially unenforceable, but other types of non-signature contracts as well.

If a company is able to arbitrarily go against their posted privacy policy, then consumers should be able to do the same in reverse for any other similar type of contract. IE, I should be able to click on one of Microsoft's "I Agree" buttons on one of their click-through licenses, and then feel free to go against it at a whim. They are both equally valid contracts, requiring exactly the same effort to "agree" to them (clicking on a little button on a webpage), and both employing the same tactic for proof of identity (they take your word for it).

It would be in any software company's best interests to fight on the FTC's side on this one.

Re:click-through and shrinkwrap licenses

[humphrm]

Actually, by the power of the same court that will be involved in this case, you can.

If you violate Microsoft's license, you're liable for mostly civil penalties. The Federal Bankruptcy court can wipe out civil liability.
So, you "agree" to not redistribute Win2000 Pro, then do so anyway. Get a greasy lawyer to deal with the criminal aspects, if any and then just sit stoicly through the civil damages trial. Upon losing, you emerge from the state civil trial and announce your impending bankruptcy. Poof! You're out of debt, including the debt recently acquired at the hands of a state Civil jury.

DISCLAIMER: I'M NOT A LAWYER. Consult a competent attorney before taking my advice, or, beter yet don't take my advice.

Re:click-through and shrinkwrap licenses

[ewhac]

If a company is able to arbitrarily go against their posted privacy policy, then consumers should be able to do the same in reverse for any other similar type of contract. IE, I should be able to click on one of Microsoft's "I Agree" buttons on one of their click-through licenses, and then feel free to go against it at a whim. They are both equally valid contracts, [ ... ]

Incorrect. There is a big fat hairy difference between overt representations and mutually-agreed contracts.

The ad you see in the paper for a hard disk at Fry's is not a contract; the vendor has not entered into a binding agreement to sell you the item at the advertised price. That agreement happens at the cash register. Nevertheless, it is illegal to advertise a particular price, and then refuse to sell at that price (or claim they're out of stock and try and sell you a different piece of merchandise). Such an action is called bait-and-switch, and is rightly prosecuted by the FTC as fraud.

Shrinkwraps, OTOH, claim to be a "contract" constraining your ability to use the merchandise you just bought and paid for. These are monsterously unethical instruments whose legality is still in serious question. See my lengthy editorial on why they shouldn't be taken seriously.

You are attempting to conflate advertised store policy with a binding contract. I am certain that contract law and the fine points of assent to contracts will not be an issue in this case, nor will they be raised by the FTC. This is a straightforward issue of "bait-and-switch" -- consumer fraud.

As for shrinkwraps, the sooner they are abolished, the better.

Schwab

Think whatever you please... (kinda OT)

[SvnLyrBrto]

>What is a libertarian supposed to think
>about it?

You aren't *supposed* to think anything about it.

Go ahead... think any damn thing you please. No one'll burn you at the stake. Form an opinion for yourself, and don't wait for the libertarian gurus to form one for you. Just because you belong to a particular political party/religion/group does NOT mean you MUST adjust your entire thought processes to fit it's doctrine.

OTOH, some of those same entities *DO* beleive that everyone MUST think alike. And will go to great lengths to silence/excommunicate their critics. Which is why I will never support groups like the republican or democrat parties, the christian church, peta, cult of scientology, micro$oft, etc.

But, the last I checked, there was nothing in the libertarian philosophy that said you MUST accept, beleive in, and think in line with, EVERY aspect of the philosophy.

john
Resistance is NOT futile!!!

Haiku:
I am not a drone.
Remove the collective if

Re:Think whatever you please... (kinda OT)

[Golias]

It sounded to me more like he was asking for advice. Ultimately, we all make up our own minds, but the wise man listens to other perspectives first. He was obviously asking how libertarian dogma applies to this situation, but even if William F. Buckly himself posted an opinion here, that does not neccesarilly mean that he would blindly follow it.

It just means he wants help sorting out what he sees as a vexing dilema, and to admit the need for such advice showed far more fortitude than your post, which reminded me of the mob in "Monty Python and the Life of Brian", who all shouted back "Yes! We are all individuals! Yes! We must all learn to think for ourselves!" in perfect unison.

NPR had this too

[Montressor]

National Public radio news had a long story on this on Friday.
One of the possibilities identified is that a judge might allow the sale of the very valuable data (this sort of thing goes for 15 bucks a name,) to a company that agrees to uphold the same garauntee.
The issues are complicated here, as the shareholders want some return of their investment, and this is one of the most valuable assets the company has.

Re:Another quick question...

[retard2112]

From their privacy policy

Our promise

At toysmart.com, we take great pride in our relationships with our customers and pledge to maintain your privacy while visiting our site. Personal information voluntarily submitted by visitors to our site, such as name, address, billing information and shopping preferences, is never shared with a third party. All information obtained by toysmart.com is used only to personalize your experience online. This information is received via the following areas of our site: My toysmart and the Gift Center. When you place additional orders, our site will update your order history, which you can view in My toysmart. If you sign up for the gift registry, information you submit will be added to your personal profile. Other than these two instances, the information that you provide us is not supplemented in any way.

You misheard

[/]

It's not that they'll sell the data to such a company. It's that they'll sell all of Toysmart to such a company, thereby sweeping the customer data issue under the rug. Selling the data by themselves would be rather senseless if the receiving company isn't allowed to make use of them.

it's like Xoom.com

[grahamsz]

Somehow this reminds me of Xoom-we-will-never-put-ads-on-your-homepage-dot-co m, and their "They aren't ON your homepage, they are on top of it" policy.

Toysmart may have pledged to never sell your personal details but toysmarts creditors probably aren't bound by the agreement that you had with the website.

Unlike xoom.com, toysmart have little to loose. If they sell your details then the creditors will be happier and if they dont then it's no big deal really.

It's a pretty sad situation

Re:Preventable?

[/]

... For the simple reason that Toysmart is in bankruptcy proceedings, and therefore anything that they do must be approved by a judge and given the imprimatur of the state. It's one thing for a company to reneg on an agreement. It's another thing for a judge to be holding the pooperscooper when it does.

All Things Considered story about this

[dsplat]

Friday NPR's All Things Considered show ran a story about the Toysmart mailing list debacle. You can find it here or for the bandwidth challenged here.

Quantifying the threat

[Elkman]

I'm curious: Does anyone out there know what kind of personal information a company would know about its customers other than what the customer knowingly provides?
As an example, I'm pretty sure that Amazon.com knows the following about me:

• My name, billing address, and shipping address(es) I've used. That's pretty obvious.
• My E-mail address.
• My credit card number. Obviously, I want to protect this. However, even though Amazon knows my credit card number, I'm reasonably sure they're not going to submit bogus charges against it. If that ever happened, I'd call my credit card company.
• My ordering history. Yeah, this is personal, but it's not like they can use this against me. Of course, if I ordered Slashdot Trolling for Dummies, I might think differently. (Besides, their history doesn't reflect the fact that I bought some books as gifts, so they seem to think I'm interested in the book Measured Drawings of Eighteenth-Century American Furniture.)
• They could have a list of books and other items I browsed, but never ordered. That doesn't necessarily reflect my interests, though, as I'm reasonably sure I won't be ordering Harry Potter and the Chamber of Secrets.

So, does Amazon.com know anything about me that I haven't told them? Or any other online retailer, for that matter? I can see that they could use my ordering history to get an idea of what my interests are, but that doesn't mean that they'll sucker me into buying every single book about Linux.
If Amazon, or any other online retailer I've done business with, ever goes bankrupt and resells my customer information, I'm not entirely sure what the threat is. Sure, it's personal information and I'd really rather not have it resold, but I'd like to at least know how much of a threat this is.

Our own "customer" database

[dsplat]

What is to stop the free software community from creating our own "customer" database. There's a great deal of information that I don't mind revealing about myself that would be a valuable marketting tool and good propaganda for free software be documenting the number of users and developers. Here's a suggested partial list:

• What free software do you use?
• How many computers do you use it on?
• Do you use any proprietary software?
• If you use Linux, which distribution(s)?
• Are you a developer?
• If so, which languages do you program in?
• Which free software web sites do you visit regularly (more than once a week)?

There would have to be a way to link the answers to people if it is going to sell. But a free software organization could collect such information from people willing to volunteer it and sell it, using the proceeds to fund projects. And a summary of the data could be a powerful argument for the size of the free software community whether or not it is sold.

Damages

[Sloppy]

What damages would arise from this?

The information is beaing treated as an asset with value. Toysmart's violation of their promise could be interpreted a theft of that value. (i.e. Now I can't sell my info to the marketer, because Toysmart already sold the pirated info.) Therefore, the damages are at least as high as the sale price of the information.

---

This isn' a hard place for libertarians

[Sloppy]

There is no conflict. Most libertarians approve of using government to oppose force and fraud. This Toysmart thingie is a form of fraud.

---

Lessons from this

[finkployd]

Do NOT give a company any more than it needs to know to sell you a product. In the case of in internet based company, they need a name, credit card number (and expiration date), and address. That is IT. If they insist on getting more information, do business with a less intrusive company.

I'm not sure where this trend started, but this business of a company not only taking your money for a product/service, but also demanding personal information for marketing purposes is outragous. If a book from Amazon costs $30.00, that is all they are getting for it, I refuse pay them more by giving them valuable marketing info that they in turn can use as currency with another company.

So don't fill in false info or get around the "Bold means required" fields of an order form, simple take your business elsewhere, and make sure to inform them why you are taking your business elsewhere. If enough people refuse to hand over personal info, they will take a hint. Unfortunatly, people have been trained by these companies to fill out surveys every time they buy something.

Finkployd

Re:Why is this insightful?

[(void*)]

In other words, once a company goes out of business, it would owe each and every one of the customers it has a profile on some money. What I am suggesting is that this *is* a debit of sorts. If the company can demostrate provably that it has indeed destroyed all records, then they don't owe this money anymore.

The choices are simple - wipe the data, or pay the penalty.

Let departing co. officers know they're watched!

[humphrm]

I just posted the following to the Toysmart Feedback Page. Feel free to copy/paste my message - let the departing officers of this failed business know that they will not get off the hook so easily. So, you think you can quietly sell of my private information just because your incompetence lead to your failure? I will not give any private information to any web sites or businesses with known associations to the following privacy policy violators, at anytime in the future: David N. Lord Mark S. Reese John Puckett Roy Liu Sincerely, A Former Customer CC: slashdot.org

Go for injunction, not class action

[John Jorsett]

Sure the users could enter into a class-action lawsuit against ToysMart, but think about what happpens if you win: you become another creditor of a bankrupt company, and your info has still gotten away. What's that bought you? And where are you going to find a contingency-fee attorney to take on the battle for what will probably amount to no money? Perhaps a lawyer can comment, but as far as I know, class-action suits are only for monetary damages, and there are none to be had here. I think what you really want is injunctive relief based on breach of contract (part of the terms they're in breach of were that they would never release your personal info). I'd think a temporary restraining order would be relatively easy to get. Then the battle becomes the attempt to get a permanent injunction, which probably won't be cheap if they (in the form of their bankruptcy trustee and creditors) decide to fight it.

how bankrupt can they be?

[jabkie]

from the article:

against Toysmart, majority-owned by the Burbank, Calif.-based Walt Disney

(emphasis mine)
--

Re:See?

[nomadic]

I'm glad we can't vote for the head of the FTC. Means Disney can't donate to his election campaign.

All contracts are revoked by bankruptcy

[YU Nicks NE Way]

The problem with the FTC's plan is that this is a bankruptcy proceding. The very act of entering bankruptcy releases an entity from all contracts between it and other entities. For instance, it releases the entity from the requirements between it and any employees it might have, and between it and any lien-holders it might have. Damaged individuals may be able to recoup some of their losses through the bankruptcy court when the entity's assets are liquidated, but that's all.

I don't like this, but I rather suspect that the FTC is about to lose. Why should the contract between Toysmart and those customers who gave away information be any more binding than that between Toysmart and those customers who ordered merchandise which they will now never recceive?