July 14, 2010 by Simon King
Fears that privacy rules could be contravened by the possible sale of a database of contacts has created controversy within the United States. The database, owned by gay teen magazine XY, has been identified as a potential asset by the magazine’s creditors.
XY magazine, which provided literature for young homosexual males, went bankrupt earlier this year. Their services included a hosted website which provided an extension to their magazine. The website had over a million subscribers, all of whom registered to access the site.
Following the demise of the XY organisation, creditors have requested that the database of names be released as an asset which could be used to mitigate part of the debt incurred by the bankruptcy. However, this move has created an outcry from people concerned at the violation of privacy rights. The Federal Trade Commission has added its voice to the argument, stating that the sale could be a violation of Federal privacy laws.
Databases have long been considered as assets which are available for sale in the event of a company going bankrupt. However, it is the sensitive nature of the XY website content which is creating the controversy. Young homosexual males who signed up to the site in good faith may have their rights contravened through the move.
Privacy International spokesperson Simon Davies commented: “While privacy policies are very clear, in the event of bankruptcy all bets are off. Information shouldn’t be used for a purpose other than for which it was originally intended. In the UK, it would be hard – under normal circumstances – to take a database and apply it for another purpose. However, in the real world, when a firm goes into receivership, all bets are off when it comes to protection, because everyone’s scrabbling for something of value. It’s yet another hurdle for data protection advocates to jump through.”
Related posts:
