RadioShack’s Bankruptcy Comes With The Possibility Of Far-Reaching Implications For Its Customers
Since filing for bankruptcy on February 5, 2015, RadioShack is now in the process of figuring out how to pay off its creditors. The company is auctioning off real estate, trademarks, patents, and other intellectual property, but one of the company’s most valuable assets is the all of the customer data it has collected over the years.
One of RadioShack’s creditors, Standard General, recently won an auction bid for the company’s assets – including its customer data. The agreement still must be approved by a federal bankruptcy court in Delaware, and it is being challenged by the state of Texas, among others. The Texas Attorney General has argued that selling customer data violates a state law that bars companies from selling data which would violate the company’s privacy policies.
Although the Federal Trade Commission cannot comment on potential litigation, it has interjected in similar past bankruptcy sales. In 2000, the FTC successfully prevented Toysmart.com from selling customer data when it filed for bankruptcy.
Fearing the precedent for privacy rights that the potential sale could create, more than 20 states have opposed the sale.