X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Heightened interest in consumers’ online privacy rights has made the process of formulating and implementing a privacy policy an increasingly complex exercise. Recent developments in the dot-com economic landscape have raised the stakes for management caught between an existing policy promising confidentiality and a pressing need to make use of what may be (one of) its only marketable assets: its customer data. The drafter of a privacy statement can attempt to minimize the tensions associated with a conflict between privacy rights and economic necessity before such a conflict materializes by anticipating changes in a business model or legal and industry standards. Drafting from a proactive posture can help a client avoid getting caught between a rock and a hard place and from becoming the next toysmart.com. As previously reported in Privacy Matters, in the January issue, the failed company attempted to sell its customer database to satisfy its creditors after filing for bankruptcy, contrary to a promise in its privacy policy that it would not share such information with a third party. Toysmart.com was then sued by the Federal Trade Commission for deceptive trade practices for reneging on its published “no-share” policy. Whether developing or revising an online privacy policy, consider the inclusion of the following provision in an effort to provide a client with flexibility should it unexpectedly find it necessary to market its customer database in a manner not consistent with the company’s ordinary business practices, for example, in connection with a fundamental organizational change or a bankruptcy. [Company] may transfer, sell or assign information concerning your use of this Site, including without limitation, personally identifiable information that you provide and other information concerning your use of the Site, to third parties, as a result of the sale, merger, consolidation, change in control, transfer of substantial assets, reorganization or liquidation of [Company]. Ultimately, the degree of flexibility created by adopting this approach is a function of its breadth: A client’s options regarding the use of its customer database increase with the number of exemptions to its privacy policy that allow it to convert customer data into a marketable asset. Susan Kent is an attorney at Brown Raysman Millstein Felder & Steiner LLPin New York. This sample clause is intended to serve solely as an exemplar and may need to be modified to conform to the legal requirements of your jurisdiction. It in no way constitutes legal advice.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.