The staff of the Federal Trade Commission’s Bureau of Consumer Protection recently sent a letter to the court handling ConnectEdu’s bankruptcy proceedings and sale of assets, which may include their customer’s personal information.
On May 23, 2014, the Federal Trade Commission announced that the FTC’s Bureau of Consumer Protection sent a letter to the court overseeing the bankruptcy proceedings for ConnectEDU Inc. (“ConnectEDU”), an education technology company, warning that the proposed sale of the company’s assets raises privacy concerns.
On 10 April 2014, the Department of Justice (DOJ) and Federal Trade Commission (FTC) issued a joint policy statement on the antitrust implications of sharing cybersecurity information to help facilitate the flow of cyberintelligence throughout the private sector. The statement addresses the long-standing concern that sharing cyberintelligence may violate antitrust law under certain circumstances and explains the analytical framework for such arrangements to make it clear that legitimate cyberintelligence exchanges will not raise antitrust issues.
And now for the question:
Q: Could my privacy policy hinder the liquidation of my company's assets?
The head of the Federal Trade Commission’s (“FTC”) Consumer Protection Bureau, David Vladeck, recently questioned the planned sale of email addresses and other information for about 48 million consumers by Borders Group, Inc. (“Borders”) as part of that entity’s bankruptcy proceeding.3 In a public letter, Mr. Vladeck noted that the data held by Borders included records of merchandise purchased (video and books) that could be perceived as personal by many customers.
Borders has long collected personal information from customers and promised that such information would not be disclosed without consent. In light of that and Borders' current bankruptcy proceedings, the FTC has sent a letter to the consumer privacy ombudsman overseeing the Borders bankruptcy that seeks the protection of customer personal information.
Personal data is a valuable corporate asset. At times, the personal information collected from customers (such as email address, mailing address, phone number, etc.) can be a company’s most valuable asset. Unfortunately, when a company attempts to sell this asset, it can find the value of the data significantly diminished due to promises made in a privacy policy the company implemented years before it ever contemplated such a sale.
The dispute over the disposition of customer records held by the "Clear" airport traveler program casts a spotlight once again on the handling of consumer personal data when a business falls on hard times. In such circumstances, the desire of the debtor to preserve or maximize the value of its business assets can conflict with legitimate privacy interests of individuals who were customers of the business.
This article was featured in the March 2010 issue of The Independent Counselor.
The role of credit counseling agencies in assisting consumers in financial distress has received a lot of positive government and media attention. Before the economic crisis, the public most often heard about credit counseling only in the context of broader discussions about consumer debt and repayment alternatives or bankruptcy.
The dispute over the disposition of customer records held by the "Clear" airport traveler program casts a spotlight once again on the handling of consumer personal data when a business falls on hard times. In such circumstances, the desire of the debtor to preserve or maximize the value of its business assets can conflict with legitimate privacy interests of individuals who were customers of the business.