FTC Warns Site Not To Sell Personal Data

itwbennett writes "The US Federal Trade Commission has warned two people associated with a now-defunct magazine and Web site for gay teens and young men that they would violate the privacy promises the publication made to subscribers by selling their personal information during a bankruptcy proceeding. The FTC, in a letter sent earlier this month, also suggested that the owners of XY Magazine and XY.com would be violating the privacy standards the company had in place before shutting down if they used the subscribers' personal information in a relaunch of the magazine or website. The personal information is listed as part of the debtor's estate in a New Jersey bankruptcy proceeding for Peter Ian Cummings, editor and founder of the magazine. Before the magazine's demise, many of the subscribers lived at home with parents."

Comments

Re:Bad Comparison

[Anonymous Coward]

It's pretty typical for any and all contractual obligations over an asset to be tossed in a bankruptcy court. E.g. say you had a patent which you'd sold thousands of covenants not to sue for, in bankruptcy ownership of the patent may be transferred without the obligation not to sue.

The FTC's recommendation is unusual and surprising and I'd expect it to be ignored or fail if challenged in court.

Re:Promises

[grantus]

The FTC has actually filed civil lawsuits against multiple companies that the agency thought didn't live up to their privacy promises. The FTC sees the act of breaking privacy promises as a deceptive trade practice that's outlawed in the FTC Act.