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Privacy The Courts The Internet Your Rights Online

FTC Warns Site Not To Sell Personal Data 120

itwbennett writes "The US Federal Trade Commission has warned two people associated with a now-defunct magazine and Web site for gay teens and young men that they would violate the privacy promises the publication made to subscribers by selling their personal information during a bankruptcy proceeding. The FTC, in a letter sent earlier this month, also suggested that the owners of XY Magazine and XY.com would be violating the privacy standards the company had in place before shutting down if they used the subscribers' personal information in a relaunch of the magazine or website. The personal information is listed as part of the debtor's estate in a New Jersey bankruptcy proceeding for Peter Ian Cummings, editor and founder of the magazine. Before the magazine's demise, many of the subscribers lived at home with parents."
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FTC Warns Site Not To Sell Personal Data

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  • Re:Bad Comparison (Score:4, Informative)

    by Anonymous Coward on Tuesday July 13, 2010 @05:44AM (#32884804)

    It's pretty typical for any and all contractual obligations over an asset to be tossed in a bankruptcy court. E.g. say you had a patent which you'd sold thousands of covenants not to sue for, in bankruptcy ownership of the patent may be transferred without the obligation not to sue.

    The FTC's recommendation is unusual and surprising and I'd expect it to be ignored or fail if challenged in court.

  • Re:Mr Cummings (Score:4, Informative)

    by cappp ( 1822388 ) on Tuesday July 13, 2010 @06:12AM (#32884904)
    To put the ruling into scale:

    The magazine, published from 1996 to 2007, collected the names and street addresses of about 100,000 subscribers and photographs and articles submitted by about 3,000 former readers, the FTC letter says. In addition, XY.com, which closed in 2009, collected the names, street addresses, e-mail addresses, personal photos and online personal profiles of between 500,000 and 1 million users, the letter said.

    . The original FTC letter [ftc.gov] also makes for an interesting read. They seem to rely both upon the original privacy statements and a broader sense of "fair play" in making their judgement.

    In this situation, however, the continued use of the XY PI, even by the existing owner, would not necessarily be consistent with the original purpose for which the data was provided. Indeed, due to the nature of the information, the passage of time, and the closure of the magazine and website in 2007 and 2009, respectively, the continued use of the data may pose privacy risks not reasonably contemplated by subscribers when they provided the data, and not consistent with their course of dealing with the company.

  • Promises (Score:3, Informative)

    by Hognoxious ( 631665 ) on Tuesday July 13, 2010 @06:46AM (#32885050) Homepage Journal

    My understanding was that the US doesn't have anything like the UK Data Protection Act [wikipedia.org] so the company wouldn't actually be doing anything illegal.

    Are these promises worth anything? Would it even constitute a breach of contract, i.e. be grounds for a civil action?

  • Re:Promises (Score:4, Informative)

    by grantus ( 261016 ) on Tuesday July 13, 2010 @07:06AM (#32885124)

    The FTC has actually filed civil lawsuits against multiple companies that the agency thought didn't live up to their privacy promises. The FTC sees the act of breaking privacy promises as a deceptive trade practice that's outlawed in the FTC Act.

  • by Anonymous Coward on Tuesday July 13, 2010 @07:29AM (#32885204)

    There is nothing preventing a company from changing its privacy policy after it has obtained your private information. Hell, there's no law requiring that they even adhere to their own privacy policy.

    Nothing to see here. Move along.

  • by Skapare ( 16644 ) on Tuesday July 13, 2010 @08:01AM (#32885378) Homepage

    "Before the magazine's demise, many of the subscribers lived at home with parents."

    And this changed how exactly after the bankrupcy of the magazine?

    While the subscriber was regularly getting the magazine in its black shrink wrapped form, they knew to look out for it, about what time it would arrive, etc. That ended when the magazine folded, and the subscriber is no longer expecting it to arrive. Or the subscriber has moved on, to college and/or their own place. Suddenly, without expectation, a new mailing arrives. Even if it has the black shrink wrap, the original subscriber is now not there, or even if there, might not be acting in a timely manner, to prevent the parental units from wondering what's in this strange black envelope and physically tearing it open. Now the damage is done where it otherwise would not have had either the magazine continued operation (the subscriber could quit, not renew, or change address, or just keep on expecting it) or if the magazine abandons its list in a restart under new ownership.

    Maybe a bankrupcy of slashdot would be a good thing for the readers too ...

    OMG! No more kitty porn???

  • FormerMember (Score:1, Informative)

    by Anonymous Coward on Tuesday July 13, 2010 @08:44AM (#32885730)

    First off, I used to be a member of that website, until it rolled downhill and everyone started using other social networks.

    The magazines were non pornographic and aimed at gay youth. They didn't feature nudity and were sold at stores like chapters.

    It had TONS of subscribers and at one point I would have believed it to be the largest gay social network. Not everyone would have their financial information or true information on the site, although it did end up possessing a ton of information about users.

  • by grantus ( 261016 ) on Tuesday July 13, 2010 @09:06AM (#32885948)

    Nothing except the threat of a lawsuit filed by the FTC. The agency has brought several similar cases.

  • by Drakkenmensch ( 1255800 ) on Tuesday July 13, 2010 @09:16AM (#32886086)

    [Remember, your Nanny loves you and only wants what's best for YOU].

    The last cyber-nanny who wanted What's Best For Me was working for SHODAN, and tried to rip me apart with lasers for trying to hurt the egg pods of The Many. Hilarity ensued.

  • by Anonymous Coward on Tuesday July 13, 2010 @09:42AM (#32886436)

    I remember the case of a hospital that stored medical records in a warehouse. They stopped paying rent and the landlord sold the file cabinets including contents to help recover his losses. The cabinets, folders and paper are physical property and property laws govern them. The information on the papers had no legal standing at all.

    Even HIPPA laws do not apply to parties who are not heath care providers or their agents but who have possesion of patient data nevertheless.

    It's the hospital that would be busted for the HIPAA violation. The hospital is obligated to prevent that from happening.

  • Re:Bad Comparison (Score:4, Informative)

    by tverbeek ( 457094 ) on Tuesday July 13, 2010 @12:55PM (#32889394) Homepage

    "The moral of the story is DON'T GIVE YOUR PERSONAL INFORMATION TO OTHERS."

    It's rather difficult to have things delivered to you without giving them your name and address. They tend to want credit card info as well.

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