​FTC's take on the RadioShack customer data appropriate (for now)

General Wireless should be bound by RadioShack's previous promises not to sell or rent customer data collected, but the future landscape is going to change. Data is a company's primary asset.

The Federal Trade Commission's move to ensure that General Wireless, which acquired Radio Shack's customer data for $26.2 million, is bound by the same privacy promises initially is a positive move for consumers but may not set the precedent hoped for over time.

The FTC said in a statement that General Wireless should be bound by RadioShack's previous promises not to sell or rent customer data collected. The FTC is seeking conditions that Radio Shack's consumer information can't be sold as a standalone asset. According the FTC, the precedent for such a condition was set in 2000 when Toysmart filed for bankruptcy and sold assets.

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A lot has changed between 2000 and 2015. The biggest change is that data is the most valuable asset for enterprises. RadioShack's database is the company. And that database now has a value based on what General Wireless paid for it.

For now, it's hard to argue against what the FTC is proposing. Certainly, the buyer of RadioShack's data should be bound by the privacy terms initially set. What remains to be seen is what happens going forward. Here are a few thoughts:

  • Companies may say they will buy and sell customer data and tweak their privacy policy terms. Would anyone really notice?
  • The argument that data shouldn't be a standalone asset isn't likely to hold up over time. Why? Customer data is a commodity no different than any other. And that data is a standalone entity. Arguing that data has to be coupled with an asset is the equivalent of saying you can't sell oil without the rig too. Data is likely to be traded just like ad inventory and stocks are.
  • Customer data is being traded on various marketing files and exchanges. Online business models depend on piecing together nuggets of information to create a complete picture of the customer.
  • When it comes to customer data, there needs to be a standard to who owns what. For instance, Apple and AT&T were peeved about RadioShack's customer data auction. And those companies should be.

Who should own the customer data? Does Apple own that customer or the retailer sold that iPhone? Is there a split on the data? Rest assured most consumers would say they're an Apple customer not Radio Shack's.

Bottom line: The FTC's take on the RadioShack data auction is appropriate. But in a world where information is the primary currency there needs to be a real discussion about the value of customer data and how it will be traded in the future.

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