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Toysmart Can Sell Customer Data - With Limitations
jmozena writes "Disney's failed Toysmart.com has gotten the go-ahead
from the Federal Trade Commission to sell its customer database as part of
a bankruptcy sale, as long as the buyer agrees to abide by Toysmart's privacy
policy.
The FTC also found that Toysmart violated the Child Online Privacy &
Protection Act (COPPA) of 1998 by collecting information from children
under 13 without their parents' consent, and is filing a complaint in
federal court to get Toysmart to destroy that information before any
sale. This is the first time the FTC has filed a complaint under COPPA.
The FTC press release is here."
EasyKill adds: "[here] is a link to the zdnet story about the FTC allowing Toysmart to sell some of their customer database, albeit under limited circumstances. I don't think this is a good thing, but it could be worse."grahamwest also points out this CNNfn story on the decision.
You may also be interested in the story emmett posted when the plan to sell this data first came to light, and the followup hemos posted about the involvement of the FTC. For once, I think I (mostly) agree with the FTC.
MIDDLE AMERICA - A record number of parents were found in violation of the Basic Human Responisibility Act which forbids them from using any form of new technology as a babysitter for anyone, especially children under 13.
When asked for comment, one Diane Whitestreet of Green Meadows, Indiana (not her real name or town) was quoted as saying "I heard about this new Internet thing, and, well, my kids said we just had to have it. So my husband bought a $7,000 Dell for each of our children and for a while, it was great. Between Soccer, Ballet, Gymnastics, Dance and of course, school, we never heard them complain there was nothing to do. If they asked for Mommy or Daddy's credit card, we let them borrow it because it made them happy and happy children are quiet, and less annoying children.
Then, when I found out these "sites" were actually recording my child's names and adresses for shipping information, I became, well, enraged. That they could hurt them in this way. It is just horrible. I can barely...talk.
I had mys husband call their company and he said perhaps we should be more careful about how we let our children use our credit cards! How dare they tell me how to raise my children! They are my responsibility!
So the next thing I did was call our representative and have him pass a bill make sure these terrible things never happen again. Thank God this is a free country and with one phone call I can prevent such things and Protect The Children."
Mrs. Whitestreet's children are a few years older now, they have gone through a lot since then...two more Dells for each child, four SUVs (only because one broke down, notes Ms. Whitestreet) and in her words "A lot of growing up."
She counts her blessings even now. "It could have been much worse." she says. "They could have been taking meth, listening to rap and hanging out with those people or even been turned homosexual by one of their recruiters!"
Mr. and Ms. Whitestreet's have since been sent to prision until their all children turn 18 so that they might have a shot at a normal life with a responsible parent assigned to them by the state.
This is a work of fiction. However you are blind if you can't see the truth in it!
After having read a couple books recommended by our CEO (he actually bought about 50 copies of each and handed them out), its sad to see how many companies out there seem to have been thrown together by the exact vision the authors see for e-commerce. The books are the HBS titles netGain and netWorth -- a good read, but only 1 view of the future of the internet. They say the future is in the infomediary, the company that builds a critical mass of users, aggregates data, and allows marketers to send advertisements to a demographic they wish to target. They do not sell the data, they are a middle man, and are supposed to be trusted. I dont know how many startups Ive seen follow almost this exact formula, but they are starting to fail BIGTIME. Tech stocks are doing so poorly that even good ones are suffering just for being in the same industry (but that is another topic). There are going to be more ToySmart stories unless a precedence is set. As I understand it, when a company goes bankrupt, its assets are liquidated to compensate the investors as much as possible. The customer data is indeed their greatest asset, but in my opinion, the investors knew very well the privacy policy when they invested their money and know the risk involved in this industry (and if they didnt, they shouldnt be investing) and in my opinion, should be SOL. However, the law is the law and is rarely compliant with common sense -- any lawyers out there been talking with others and know which way the wind is blowing?
The ivory tower has never had to reach so h
The public has voted for convenience over privacy. That's why non-anonymous financial transactions (e.g., credit card purchases) and their associated loss of privacy have succeeded online, whereas anonymous payment schemes -- like prematurely launched DigiCash -- just haven't taken hold. Yet. (I'm hopeful.)
Any company that states it won't sell personal information is lying. And so what if the company gets fined: your information has already been sold.
Admiral Yamamoto
The ruling they have made now could only be the beginning of a policy where customer databases are seen as any other form of capital, wich in case of bankrupcy can be sold off.
If this stands the next one to go will probably get less restrictions, and the next even less. In the end people could be alowed to sell their databases without any restricitions at all.
This should be stopped now, or all the "We will not share information"-clauses are without value.
If customer data is now deemed to have a direct and independent monetary value rather than merely in association with a product, maybe the coporations that are gathering that data from us ought to be paying for it -- ie. paying us.
:-)
After all, everything's a business. We're not a charity either.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
Now, more than ever, should we all make sure we are giving as much inaccurate and incorrect information when filling out online signup forms.
A policy of disinformation and dishonesty has served some of our finest public and private leaders well. We would do well to heed their example.
This is where I disagree the most.
From CNNfn:
The problem I have is that Toysmart and various others (with consent of the courts and the FTC) are selling what they shouldn't technically own. As a customer I would never have said that they can give my details to anyone else without my direct consent - irrespective of whatever conditions they put on it. They had restricted use of it for inside purposes only, and that's exactly what the privacy agreement said.
Creditors made the mistake of investing in Toysmart. They took the risk and it didn't pay off. They shouldn't be compensated by the loss of a third party.
Physical goods verses information shouldn't be treated differently. Can a company being liquidated sell it's employees home computers because they once did some company-related work on them? If not, how can it sell it's customers details simply because it has restricted access to them for use within the company?
From memory, one of the problems is that because the company no longer exists, any agreements it had are invalid.. or something like that. (Can anyone elaborate?) Perhaps model privacy agreements of the future should have a clause in them to specify that this can't happen. Otherwise I'll certainly think hard about giving any details away if the practice of selling databases becomes more common.
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