Texas wants RadioShack to specify what customer information would be for sale

The dispute between U.S. states and RadioShack over the sale of customer information continues, with the state of Texas requesting a bankruptcy court to ask RadioShack to specify in any motion for sale what information would be included and the number of people likely to be affected.

Texas Attorney General Ken Paxton is concerned that although the personally identifiable information (PII) was not sold in a recently concluded auction, in argument and testimony during the sale hearing, RadioShack “has indicated that PII remains available for sale and will likely be sold in the future, attendant to the sale of trademarks and/or intellectual property,” according to a filing Wednesday.

Paxton, who is leading the action in the U.S. Bankruptcy Court for the District of Delaware on behalf of several states, had on Tuesday welcomed the decision by RadioShack to table plans to offer for sale the PII of its customers.

“We urge RadioShack to make a blanket vow that it will live up to the assurances it provided 117 million customers and entirely rule out any such sale in the future,” he added.

The state of Texas has objected to the sale, citing both in-store and online privacy policies of the consumer electronics retailer. The case has privacy implications across the industry as a decision to allow the sale of personal information could be a precedent, for example, for large Internet companies, holding consumer data, if they happen to go bankrupt.

Asking for a case management order to govern any future sale of any PII by RadioShack, Paxton is asking that any motion seeking the sale of the PII should specify whether the information is limited to only contact information, such as name, address, phone number, and email address, or whether it also includes other information such as credit card numbers or account history. The motion should also specify the number of customers affected by the sale.

The state had earlier held that the number of customers affected would be 117 million, based on a deposition by RadioShack on March 20. But it has since found from testimony in court that the number of customer files offered for sale might be reduced to around 67 million.

The filing by Texas state also asks that a consumer privacy ombudsman shall file a report after the filing of any motion seeking to sell PII. The witness for any purchaser of the PII should be able to testify “regarding the purchaser’s business and what the purchaser intends to do with the PII.”

Texas’ opposition to the sale of PIIs by RadioShack was joined by the states of Tennessee, Pennsylvania and Oregon. Governmental consumer protection agencies in 32 states have also extended their support to the action. Georgia, Missouri and West Virginia also sent letters of support to the Texas attorney general’s office, according to the filing.

The Delaware judge on Wednesday approved a plan by RadioShack to sell about 1,700 stores to hedge fund Standard General. Most of the stores are planned to be rebranded with wireless operator Sprint.

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