RadioShack Rings up Brand and Data Deal

RadioShack Rings up Brand and Data Deal

Once known as the “World’s Leading Specialty Electronics Retailer” (clock radios, scanners, remote-controlled cars, anyone?), RadioShack declared bankruptcy in February and is now selling its brand and customer data to the highest bidder — the hedge fund Standard General. The $26.2 million deal has raised concern among independent dealers and franchisees as well as state officials and consumer protection advocates.

Per Ars Technica, the states of Tennessee, Texas and companies Apple and AT&T raised privacy concerns and filed objections over the sale and release of the data of 117 million customers (names, physical and email addresses, phone numbers and more). Apple and AT&T claim that they, not RadioShack, own the sensitive information, which was gained during the sales of iPhones and AT&T services.

This week, the Federal Trade Commission (FTC) submitted a possible compromise to the bankruptcy court presiding over the case that would permit RadioShack to sell its database with certain conditions.

Consumer Protection Director Jessica Rich advised RadioShack to review the Toysmart’s bankruptcy case in 2000. Like RadioShack, Toysmart wanted to sell its database but agreed to particular limitations. Per Ars:

“For example, the buyer could not buy the customer database alone — it had to receive it bundled in with the sale of other assets like trademarks or Web content. In addition, the information had to be sold to a business similar to Toysmart and that buyer had to agree to honor the privacy policy that Toysmart had pledged to its customers.”

If RadioShack can’t meet the conditions, Rich advises that prior to selling the database, it should receive “affirmative consent” from each one of its customers. As Ars points out, the FTC’s suggested compromise doesn’t address Apple and AT&T’s concerns.

The hearing on whether customer data can be sold begins today, May 20, 2015.

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