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I see this kind of thing all too frequently. Our clients are retailers. From time to time, one goes pop, and goes into administration. The liquidators look at a
by madaxe_again 11y ago
I see this kind of thing all too frequently. Our clients are retailers. From time to time, one goes pop, and goes into administration. The liquidators look at all of their assets - initially, at things like stock and other physical assets - but then look at their other less tangible assets, like user data, as selling it can be the difference between settling with creditors or not.
Typically, when you license your data to a company you accept that they can sell that data as part of the sale of the business, in the event of administration or liquidation, and a variety of other situations in which you don't want to have to ask the permission of your N million users to go ahead with a merger or other essential business activity.
Further to this, we've also seen client service agencies who are processors of data seizing user data as an asset if a client goes into administration and leaves their service providers as unsecured creditors (i.e. "you're up the creek, we'll pay you £0.000001 for every £ we owe, your £80,000 is now £0.80"), as they also have a responsibility to mitigate their own losses, and again, contracts usually allow for the seizing of assets in the case of default.
So, long story short, this is not even slightly abnormal, and something consumers should consider before providing their data to anyone.
- dm2 11y agoThe "we will never sell your data to anyone" in a Privacy Policy effectively means nothing at all. Why are there not consumer protection laws in place to prevent this? In my opinion, in order to sell customer data you should have to go to court and have a judge look over the data to determine what can be sold.
- ascagnel_ 11y agoThis is an instance where a judge can create a consumer protection common law.
- madaxe_again 11y agoI've little faith that any judge would do anything other than "ah. This is something... computer. don't know. Yes?". It's the same "shutters coming down with a bang!" phenomenon as one sees with most non-technical folks the moment they think something technical might be coming their way. Either way, this is a very grey area, as if you tie up corporate affairs with every single one of your customers, it would make your business unsaleable, and make liquidation impossible, so while consumer protection is desirable, there also have to be measures that allow businesses to operate without the explicit consent of each and every one of their customers for any action.
- dm2 11y agoI see your point about businesses being unsellable. What's the difference in Facebook acquiring WhatsApp's customer database via purchasing the entire company and it being sold numerous times during a hypothetical WhatsApp liquidation sale? None really, and whatever WhatsApp's (and all other companies) Privacy Policy said about protecting user data is somewhat meaningless.
- madaxe_again 11y agoYup, nail on head. Increasingly the value in a business is the customer base, and therefore their data - this will only continue as the service economy grows and brand continues to be king.
- matthewmcg 11y agoThere's actually a whole section[1] of the bankruptcy code that requires precisely that. The court can even appoint a special consumer privacy ombudsman as it determines what data may be transferred. [1]https://www.law.cornell.edu/uscode/text/11/332 https://www.law.cornell.edu/uscode/text/11/332
- dm2 11y agoThanks for posting that. It's good to know that data is somewhat protected after bankruptcy if a company's privacy policy is in favor of it. Here is another good article on that particular subject: https://www.turnaround.org/Publications/Articles.aspx?objectID=5918 https://www.turnaround.org/Publications/Articles.aspx?object...