As the dot-com craze continues to slow and more companies fall victim to bankruptcy, are consumer privacy rights being sacrificed for a quick buck?

Privacy for Sale

As the "dot-com" craze continues to slow and more and more companies fall victim to bankruptcy, are consumer privacy rights being sacrificed for a quick buck? Apparently so.

The latest dot-com casualty, Voter.com, recently announced plans to sell its list of 170,000 e-mail correspondents, complete with political party affiliations, issues they're concerned about and other demographic information, such as home zip-codes and their gender.

The privacy debate over the sale of personal data collected by bankrupt dot-coms is not a new one. Last year, bankrupt Toysmart.com announced plans to sell its customer list as a way to generate revenue. The Federal Trade Commission moved to block the sale, claiming it violated the company's privacy statement. The issue was resolved when the Walt Disney Company, which owned a majority of Toysmart.com, agreed to acquire the list and destroy it. A bankruptcy judge approved the settlement in January.

Congress is currently considering legislation that addresses some privacy concerns in instances where companies go bankrupt.

Senator Patrick Leahy (D-VT) recently added a provision to a broad bankruptcy reform bill (S. 420) which would forbid companies from selling their customers' personal information to outside parties if they had promised they wouldn't, or unless a judge weighed the privacy implications and allowed the sale to proceed. The legislation was recently approved by the Senate. The version of the bill approved earlier this year by the House of Representatives did not include Leahy's privacy protection provision, therefore a conference committee will have to agree to it before it is sent to President Bush for his consideration.

The sale of such personal data leaves consumers vulnerable to misuses of their sensitive information. It is important to ensure consumer privacy protections as more and more failing companies retreat to the sale of their consumer lists as a source of revenue.

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