Online auctioneer eBay has revised its privacy policy to allow the company to share customer information in the event that eBay or one of its subsidiaries merges with or is acquired by another company.
"It is possible that eBay, its subsidiaries, its joint ventures or any combination of such could merge with or be acquired by another business entity. Should such a combination occur, you should expect that eBay would share some or all of your information in order to continue to provide the service. You will receive notice of such event (to the extent it occurs)," the privacy policy now reads.
The revision, posted a week ago, would explicitly allow eBay to transfer that information and avoid the legal hassle the now-defunct Toysmart.com encountered when it tried to sell its customer list as an asset during bankruptcy proceedings last summer.
Two months ago, a federal judge ruled in favor of a deal in which Buena Vista Internet Group, a subsidiary of The Walt Disney Co., would pay Toysmart US$50,000 to destroy its customer list. Disney owned 60 percent of the bankrupt company.
Both eBay and Toysmart had agreed not to sell customer information to third parties in exchange for the right to post the Truste privacy symbol on their sites.
That promise, and Toysmart's subsequent attempt to sell the list, angered privacy groups, including Truste, and gained the attention of the US Federal Trade Commission. Both sought to block the sale.
The US House of Representatives and the Senate each recently passed similar privacy protections, and President Bush is expected to sign a final bill soon.
The legislation forbids companies from selling customers' personal information at the time of bankruptcy if they had previously promised they wouldn't do so. However, a sale or lease of the data can go through if it's consistent with preexisting company policy or if the move has come under court consideration.