RadioShack sale of customers' personal data may be unlawful, warns FTC

RadioShack promised not to sell the data, and there's a past precedent for such a case.

(Image: Wikimedia Commons)

RadioShack's buyer should be made to protect the tens of millions of customer data it collected over the years, the Federal Trade Commission has said.

FTC consumer protection director Jessica Rich urged the bankruptcy court overseeing the failed retailer's case to put restrictions on the data, forcing the buyer of the data, General Wireless, to be bound by the same terms that governed the data when consumers first provided their information.

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Rich cited RadioShack's prior promises "not to sell or rent" the information it collected. She cited a similar case where Toysmart settled with the FTC after the company sought to sell data, counter to its privacy promises.

She argued this set a precedent for an "appropriate model" to apply to the RadioShack case.

RadioShack filed for bankruptcy protection earlier this year after years of financial decline. The company said it would restructure and sell off parts of its assets. But the personal data on millions of its customers remained in limbo.

General Wireless beat more than a dozen companies to snap up the company's brand name and other intellectual property (including the customer records database), paying $26.2 million in total.

A number of companies had opposed the sale of data, including AT&T and Apple. Attorneys general from three-dozen US states also opposed the sale of the data, according to Reuters.

General Wireless said it was "committed" to maintaining RadioShack's privacy policies.

On Wednesday, RadioShack's legal team will ask the bankruptcy court to approve the sale of the data.

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