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

Mr Cummings

[Anonymous Coward]

Is that a stage name ;-)?

Re:Mr Cummings

[cappp]

To put the ruling into scale:

The magazine, published from 1996 to 2007, collected the names and street addresses of about 100,000 subscribers and photographs and articles submitted by about 3,000 former readers, the FTC letter says. In addition, XY.com, which closed in 2009, collected the names, street addresses, e-mail addresses, personal photos and online personal profiles of between 500,000 and 1 million users, the letter said.

. The original FTC letter also makes for an interesting read. They seem to rely both upon the original privacy statements and a broader sense of "fair play" in making their judgement.

In this situation, however, the continued use of the XY PI, even by the existing owner, would not necessarily be consistent with the original purpose for which the data was provided. Indeed, due to the nature of the information, the passage of time, and the closure of the magazine and website in 2007 and 2009, respectively, the continued use of the data may pose privacy risks not reasonably contemplated by subscribers when they provided the data, and not consistent with their course of dealing with the company.

Censorship Software would help protect Children

[Anonymous Coward]

Most teenagers shouldn't have anything to worry about because responsible parents will have programs like Cyber Patrol and CYBERsitter installed to prevent their children and teenagers from accessing these sexually oriented sites. It's funny because under the Australian Internet filter this type of situation wouldn't even be an issue.

[I'll spell this out early on here. I am not a Troll, just offering some political sarcasm, thank you very much. Remember, your Nanny loves you and only wants what's best for YOU].

Bad Comparison

[dreamchaser]

Even the submission says it's because the company in question had privacy policies in place prior to going bankrupt. They would be violatinig said policies if they give away or sell the data. Listing it as 'assets' in bankrupcy court when they weren't supposed to sell it in the first place was a mistake by them.

The Selective Service has no such polcies.

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: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.

Re:Bad Comparison

[Artifakt]

One of the things I noticed re. Copyright law (a favorite subject for Slashdot, of course): I ran across the copyright indexes of several authors, such as H. P. Lovecraft, who were big on only giving magazines first publication rights, not the standard 'all rights' clause in contracts. Lovecraft was part of the amateur press scene of his time and actually wrote articles about it, aimed at new authors, plus he metioned it in several letters to fellow authors. HPL also died during the depression, and if you look at the copyright history of his work, a lot of stories pass from a single magazine such as Weird Tales, through many different small companies' hands, before the rights ended up being purchased by August Derleth and Donald Wandrei after the depression ended.
      It looks like a bunch of small presses bought republication rights from magazines such as Weird Tales that the magazine may not have actually owned to sell, and passed these around in one standard contract after another. It looks very strange to see four stories published in the same magazine the same year, all passing through different small press owners hands, with a bunch of corporate names that are all swiftly out of existence, have little or no actual publication history, or seem to maybe be nothing but shell corporations. You have to wonder, if Lovecraft is any indicator, if Weird Tales actually took the time to sell off rights to thousands of old stories one at a time, to literally hundreds of separate companies, instead of bundling them somehow. The explanation seems to be that at least some of these contracts came out of bankruptcy courts, which were working overtime in that era. Unfortunately, only a few of these documents have good paper trails, and it's hard to really prove one way or another.
        Given the middle of the Great Depression connection, I've wondered if this was because bankruptcy courts were distributing these assets as part of big pools of similar fluff, without taking the time to check all the details on items they doubtless felt were of little real worth. Probably they were focusing on the physical assets of the companies, where those existed, and didn't expect these 'IP' assets to ever come back into print.
        This may bear out what the OP wrote. In practice, the bankruptcy courts seem to sometimes ignore restrictions in contract whether that's really what the law says to do or not, particularly if the asset is perceived as having little value compared to the rest of what the court has to deal with.

Re:Bad Comparison

[tverbeek]

"The moral of the story is DON'T GIVE YOUR PERSONAL INFORMATION TO OTHERS."

It's rather difficult to have things delivered to you without giving them your name and address. They tend to want credit card info as well.

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.

I have just one thing to say

[Chrisq]

I'll be buggered if I enter my personal details on a gay teens website!

Re:I'm from future

[pla]

And this same news was posted expect for the fact that the magazine was substituted with website. "Before the website's demise, many of the subscribers lived at home with parents."

Self-debasing humor aside, you have rather a significant difference between a site like Slashdot selling out, and a magazine for gay teens.

Most notably, paying for and receiving a physical magazine means the company has your name, CC info, and physical address; Slashdot has a dynamic IP address, a largely anonymous handle, a throwaway contact email address that likely filled with spam and died at least five years ago, and knows my default comment threshold.

Not to mention, society doesn't stigmatize geekdom (these days) quite the same way it does homosexuality. Although I find the Slashdot crowd far more tolerant of such issues than the general public, our "perverse love" of technology rarely gets us lynched.

Where do the subscribers live these days then?

[YeeHaW_Jelte]

"Before the magazine's demise, many of the subscribers lived at home with parents."

And this changed how exactly after the bankrupcy of the magazine?

Maybe a bankrupcy of slashdot would be a good thing for the readers too ...

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.

Think positively

[Moraelin]

Well, think positively. As more and more people grow up with CS and clones and other online games, soon we'll have a whole generation who thinks "gay" means "got more than one kill with a sniper rifle" or "won the roll on a piece of loot you wanted too".

And for that matter than "I fucked your mom" is the new "good morning, sir. How do you do?" I can imagine a business meeting in 2020 going something like:

CEO: "And now Mr Stevens the VIP of marketing will present the results from the latest market poll."
Stevens: "I fucked your moms, ladies and gentlemen."
Chorus: "Your mom's fat."
Stevens: "As you can see on this graph, after our latest PR campaign, our brand recognition has risen by almost 20% and the sales by nearly 10%."
PHB from the audience: "Dude, you're gay."
Stevens: "Thank you."

At any rate, they'll probably think that having been subscribed to a gay magazine is like subscribing to some gaming tricks site ;)

Re:Promises

[Skapare]

The data is still in the hands of the original owners. By filing this with the BK court, the FTC has established that it is illegal (unless another party's argument can prevail, and this would most likely have to be litigated in a separate venue, not in BK) for the sale to be made. Effectively, the subscribers have a lien on the data, which amounts to an ownership of the right sale, held by the subscribers themselves, in absence. Selling it might then be considered no different than the sale of stolen goods (which even a BK court cannot do).

Re:The morals of outing

[boneglorious]

If you're not willing to stand by your beliefs openly, then you may want to reconsider them. And democracy runs best when people are willing to continually reconsider their beliefs, rather than when people get an idea and then cling to it, regardless of how shamed or secretive they may feel about it.

It's true that sometimes people do fear retribution for political actions, and justifiably so, but the only way to foster an open discourse, where social norms don't favor revenge or retribution, is to be open about one's beliefs and contribute to healthy debate.

Re:The morals of outing

[compro01]

No one is trying to prevent people from exercising their civil rights. They are, however, trying to prevent people from perverting an existing institution designed to build families.

So would you be in favour of prohibiting the marriage of heterosexual persons who do not plan on raising children?