RadioShack Wants to Sell Customer Data, States File Suit
The demise of RadioShack was already one of the more saddening corporate bankruptcies in recent history, and now it’s also one of the slimier ones.
Ars Technica reports that the nearly 100-year-old company wants to auction off the personal data it has collected on nearly 117 million customers. The auction would have been held as part of RS’s court-supervised bankruptcy and included "consumer names, phone numbers, mailing addresses, e-mail addresses, and, where allowed, activity data", but legal objections from two states have stymied the matter.
On Friday the state of Texas filed an opposition brief, and it was joined on Monday by Tennessee. Both states object to the sale, and they point out that the sale would breach the promises RadioShack made to its customers to the effect that it would not traffic in their data.
"The Debtors have affirmatively stated in multiple privacy policies currently in effect that consumer PII (personally identifiable information) will never be sold. Yet the Debtors come before this Court with a Motion which seeks to do precisely that," according to the legal challenge (PDF).
To be more exact, Texas and Tennessee are pointing at these lines inand crying foul:
- Information about you specifically will not be used for any purpose other than to carry out the services you requested from RadioShack and its affiliates. All of our affiliates have agreed to maintain the security and confidentiality of the information we provide to them.
- We will not sell or rent your personally identifiable information to anyone at any time.
- We will not use any personal information beyond what is necessary to assist us in delivering to you the services you have requested.
Texas argues that auctioning off the data would violate the Texas Deceptive Trade Practices Act, as well as similar laws in other states.
To make matters worse, AT&T is also objecting to the auction; the telecom claims that some of the data doesn’t even belong to RS but was collected as part of a partnership with AT&T.
What a mess, and it’s probably going to get worse.
RadioShack filed for Chapter 11 bankruptcy protection in February, and it listed more than $1.3 billion in liabilities and $1.2 billion in assets.
About 2,000 stores are going to be shuttered as early as the end of the month (no one wants to buy them), but the chief shareholder and leading creditor is planning to keep planning to keep around 1,700 of the stores open and operating. They’ll be rebranded as Sprint, which will be leasing some space in the stores. I have no information on what will happen to the franchise locations.
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