A Massachusetts judge has approved a proposal by the bankrupt US
internet retailer Toysmart to destroy a customer list that became
the subject of a privacy dispute last year when the company offered
to sell the list to the highest bidder.
The US Federal Trade Commission opposed the proposed sale of
sale of the information that details the transactions, names,
addresses, phone numbers and e-mail addresses of around 250,000
Toysmart customers.
In Europe, data protection laws regulate the destruction of
personal information such as customer details. However, the US has
no equivalent law. Instead, the FTC relied on Toysmart’s own
privacy policy which promised not to disclose the personal
information of its customers to third parties. It successfully
argued that to sell the data would be in breach of the policy.
The proposal to "buy and destroy" came from Buena Vista Internet
Group, a subsidiary of Walt Disney Co. which owns 60% of Toysmart.
The sum offered was $50,000. It is thought that the offer was made
to end the negative publicity in the case.
Judge Carol Kenner this week ordered that the payment should be
made but that list should not be transferred to Disney and should
instead be held by Toysmart’s lawyers until all claims against the
company are settled. Thereafter, the list must be destroyed and the
company should provide an affidavit to the court to confirm its
destruction.
