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:Yet the US gov got Birthday Club data

[Anonymous Coward]

It was all a big Google (mistake) when exposed.

Bah. Stop trying to invent a new /. meme. It's not even funny.

Re:Bad Comparison

[MadKeithV]

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

It's going to be a pretty interesting storm if this fails if challenged in court, because it creates a semi-legal avenue for personal information harvesting, bypassing just about all privacy laws (barring perhaps things like HIPAA).
In slashdot terms:

1. 1. Set up facebook-like site with really good privacy rules.
2. 2. Let site grow with lots of safe personal details
3. 3. Go bankrupt.
4. 4. Sell personal information legally for profit.

Re:Bad Comparison

[rollingcalf]

"It's pretty typical for any and all contractual obligations over an asset to be tossed in a bankruptcy court."

However, it's not so simple when an asset held by the bankrupt company wasn't really theirs to sell in the first place. Suppose they had a fleet of cars which were leased. If they go bankrupt during the lease, they have to give the cars back, and cannot sell them.

In a sense, the personal information was leased to company; it was never theirs to sell and shouldn't become theirs to sell just because of bankruptcy.