Sports Authority Auctions 25 Million Customer E-mail Addresses

by San Antonio Attorney

Since Sports Authority Inc. is shutting down and everything in the company must go – that includes the personal information of its customers.

The U.S.  sports retailer filed for Chapter 11 bankruptcy in March.  This week, the company will auction its intellectual property, which includes its name and 114 million data files and 25 million email addresses of customers.  Dick’s Sporting Goods is the successor with a bid of $15 million.

The valuable customer data, according to experts, could be helpful to the new owner by capitalizing on Sports Authority patrons who are searching for a new store to shop.

More and more businesses realize the importance of customer data that is why it is normally included in the bankruptcy auction.  However, as consumers desire to protect their personal information in the upshot of controversial breaches at companies like Target and Anthem Inc., the bankruptcy auction is one way consumers can lose control of their private information.

Companies have legal right to auction customer information provided that their privacy policies clearly state that data can be sold or transferred if the business goes under or is acquired.  This policy applies to Sports Authority.

Once a new owner gets hold of customer data through merger or acquisition, the new customers usually assume the same privacy policy they followed with the former owner.  However, this is not always the case.

Ambiguous terms used in a privacy policy enables companies to impose new rules to customers.

During the bankruptcy proceeding of RadioShack in 2015, the company tried to get away from a privacy policy that guaranteed not to give away mailing lists or customer data.  This led to protest from privacy advocates and ultimately caused the Federal Trade Commission to intervene.  The electronics chain was advised by the FTC to only sell the data along with the stores.

The customer data and company was bought by Standard General for $26.2 million.

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