Last Friday, the Federal Trade Commission (FTC) resolved the controversial Toysmart.com bankruptcy case. After ceasing operations on May 22, 2000, Toysmart.com contracted with a Boston-based management-consulting firm, The Recovery Group, to solicit bids for its assets. Among the assets was a customer list, which contained names, e-mail addresses, and payment information.
(1)Personal information voluntarily submitted by visitors to our site, such as name, address, billing information and shopping preferences, is never shared with a third party. All information obtained by toysmart.com is used only to personalize your experience online. (2)When you register with Toysmart.com, you can rest assured that your information will never be shared with a third party.
“If we really believe that consumers attach great value to the privacy of their personal information and that consumers should be able to limit access to such information through private agreements with businesses, we should compel businesses to honor the promises they make to consumers to gain access to this information.”
In dissent, Commissioner Orson Swindle argued: “If we really believe that consumers attach great value to the privacy of their personal information and that consumers should be able to limit access to such information through private agreements with businesses, we should compel businesses to honor the promises they make to consumers to gain access to this information.”
While it is undeniable that Toysmart.com’s customer list was its most valuable asset, Commissioner Swindle’s argument is difficult to dispute. Burdensome regulation is an inevitable outcome if the primacy of private contracts is not honored.
Government has historically been the worst violator of citizens’ privacy. This decision underscores the need for private-sector solutions to the problem. If government is unwilling to enforce contracts that protect privacy, there is little hope that further government meddling will do any good. Only technological solutions can empower consumers to decide what information to share and with whom to share it.