Does Bankruptcy Put a Gay Website's Teen User Info Into Creditors' Hands?
An effort by bankruptcy creditors to obtain the one valuable asset of a dying website—its database of information about 1 million subscribers and users—is raising privacy concerns both in the United States and abroad.
Because the website is for XY Magazine, whose focus is on young men and teenage boys who are gay, the user information is particularly sensitive. And, says a letter sent by the Federal Trade Commission earlier this month to counsel involved in the in the New Jersey bankruptcy case, providing subscriber information to creditors or even using it to start a similar publication or website could be considered an unfair or deceptive practice by the FTC, according to the BBC and IDG News.
That’s because the website reportedly guaranteed subscribers anonymity and the sale would hence violate its terms of use says the FTC in the letter (PDF), asking that the information be destroyed rather than sold.
Peter Ian Cummings, the magazine’s founder and editor, made a bankruptcy filing in February of this year, listing personal assets of $1,500 and no income whatsoever. However, he does have assets, the filing states: They are the “customer list, personal data and editorial and back issues of XY Magazine and XY.com.”
The Economist’s Babbage blog predicts that the FTC will manage to quash the transfer of the subscriber information but notes that the federal agency is likely to do so via a settlement:
“The bad news, however, is that although the FTC seems to have been successful in strong-arming companies into keeping data private, what it seems not to have managed is to set a legal precedent.”
