The demise of RadioShack left techies with one less place to congregate and buy obscure batteries and soldering equipment. And if that wasn’t bad enough, now the bankrupt company is trying to sell off the devotees’ data.
After filing for bankruptcy in early February, RadioShack is currently making its way through the painful process of figuring out how creditors will be paid back – auctioning off real estate and trademarks. Also on the list is more than 13 million email addresses and 65 million customer names and physical addresses – as well as potential information about customers shopping habits.
How much that data could be worth to a buyer is still unclear, but the proposed sale is drawing protests from consumer advocates and raising disturbing questions about how data about shoppers is handled.
In the Internet Age, people leave a near constant trail of digital bread crumbs about their lives. And it’s clear that data has value: The entire online advertising industry is based on collecting it. But what happens if a company that has amassed a huge trove of data on nearly every aspect of a person’s life gets sold off for parts?
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Radio Shack declined to comment about its bankruptcy’s process.
But as Bloomberg News noted, a website for Hilco Streambank, a company serving as an intermediary for RadioShack in the bankruptcy process, listed the retailer’s “customer databases” as among the assets for sale. Hedge fund and RadioShack creditor Standard General won an auction for the companies’ assets, according to Bloomberg. But the deal must still be approved by a bankruptcy court in Delaware and is facing several challenges.
The potential sale of customer information is among the terms being challenged, prompting complaints from the state of Texas and AT&T.
AT&T is arguing that some of the data that RadioShack is trying to sell actually belongs to the mobile phone giant. AT&T worked with the retailer to market some of its phones and should not be able to auction off the information about those sales, the company says. The data should be destroyed, AT&T says, because it might fall into the hands of its competitors.
The Texas challenge is broader: Texas Attorney General Ken Paxton is arguing that the sale would violate a state law that prohibits companies from selling data in ways that violate the company’s own privacy policies. Tennessee’s Department of Commerce and Insurance joined in on that objection earlier this week.
And the federal government’s de facto privacy watchdog, the Federal Trade Commission, might also be interested. The agency declined to weigh in specifically on the RadioShack matter because it doesn’t comment on areas of potential action, but it has intervened in bankruptcies involving the sale of customer data in the past.
While the FTC has ramped up its efforts to protect consumers’ privacy from new digital threats, it largely intervenes on a case by case basis. So with consumers casually turning over data to many different online and mobile services, people may find they’ve lost control of a lot of information about themselves the next time a tech bubble bursts.