RadioShack presses ahead plan for sale of customer data

The sale of the personal data was withdrawn from a previous auction

RadioShack will press on with its plan to sell its customer data, despite opposition from a number of U.S. states.

The company has asked a bankruptcy court for approval for a second auction of its assets, which includes the consumer data.

The state of Texas, which is leading the action by the states, has opposed the sale of personally identifiable information (PII), citing the online and in-store privacy policies of the bankrupt consumer electronics retailer.

The state claimed that it found from a RadioShack deposition that PII of 117 million customers could be involved. But it learned later from testimony in court that the number of customer files offered for sale might be reduced to around 67 million.

In the first round of sale, RadioShack sold about 1,700 stores to hedge fund Standard General, which entered into an agreement to set up 1,435 of these as co-branded stores with wireless operator Sprint. Some other assets were also sold in the auction.

The sale of customer data, including PII, was withdrawn from the previous auction, though RadioShack did not rule out that it could be put up for sale at a later date.

The case could have privacy implications for the tech industry as it could set a precedent, for example, for large Internet companies holding consumer data, if they happen to go bankrupt.

Texas has asked the U.S. Bankruptcy Court for the District of Delaware for a case management order to ensure that in any motion for sale of the PII, RadioShack should be required to provide information on the kind of personal data that is up for sale and the number of customers that will be affected.

The state's Attorney General Ken Paxton asked the court in a filing to rule that any motion seeking the sale of the PII should specify whether the information is limited to only contact information, such as name, address, phone number, and email address, or whether it also includes other information such as credit card numbers or account history.

On Monday, Texas asked the court that its motion be heard ahead of RadioShack's motion for approval to auction more assets.

The court had ordered in March the appointment of a consumer privacy ombudsman in connection with the potential sale of the consumer data including PII. RadioShack said in a filing Friday that it intends to continue working with the ombudsman and the states with regard to any potential sale of PII, but did not provide details.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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