RadioShack tries to sell customer data, in direct violation of their corporate policies

By Robin Hammond

RadioShack declared bankruptcy and the internet erupted. Some people who saw this as inevitable argued that their products were obsolete—for example, every single product advertised in a 1991 RadioShack flyer can be replicated by a smartphone. Some argued that their business model was unviable, and pointed to their managerial and labor practices. Others have decried the joyful nature with which the internet is reacting to the death of a 94-year-old business. One only needs to peruse the catalogues from 1939 through 2011 to see how the business has changed. As part of the bankruptcy, RadioShack is attempting to auction off customer data from 117 million customers, including “consumer names, phone numbers, mailing addresses, e-mail addresses, and, where allowed, activity data.”

RadioShack is incorporated in Delaware and has its headquarters in Texas. The Texas Attorney General filed a limited objection to the sale of Personal Identifying Information (PII), and outlined RadioShack’s stated privacy policies. RadioShack has separate privacy policies for their web-platform and in-store locations. All versions of the privacy policy contain an unequivocal provision that consumer PII will not be sold. “We will not sell or rent your personally identifiable information to anyone at any time.” The online privacy policy gives further assurances that “[i]nformation about you specifically will not be used for any purpose other than to carry out the services you requested from RadioShack and its affiliates. All of our affiliates have agreed to maintain the security and confidentiality of the information we provide to them. . . .” and “[w]e will not use any personal information beyond what is necessary to assist us in delivering to you the services you have requested.” Furthermore, in-store signage stated similar information, including the statement “We Respect Your Privacy. We Do Not Sell Our Mailing List. The information you give us is treated with discretion and respect. We pride ourselves on not selling our private mailing list.”

The state of Texas argues that this sale violates applicable non-bankruptcy law, including the Texas Deceptive Trade Practices Act and consumer protection laws in other jurisdictions. The state argues that it is a “false, misleading, and deceptive business practice” under the Texas Business and Commerce Code to sell PII, in light of the privacy policies. Five days after Texas filed its objection in Texas, it filed a supplemental objection in Delaware, stating that twenty-one governmental (consumer protection) entities and the following states support their objection: Arkansas, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Montana, Nebraska, Nevada, Rhode Island, South Carolina, Washington, and Wisconsin.

Selling PII is not new nor illegal. Recently, political figures have been criticized for ‘renting’ email-lists and misusing email-lists. In politics, in campaign finance, and in corporate America, the privacy of consumer data is becoming a hot topic. What is interesting about the RadioShack case is Texas’ legal challenge, and the seemingly widespread opposition to the sale of PII.