Having attended the University of Michigan, I regularly hung out in the very first Borders bookstore of the Ann Arbor-based company, which is now going through bankruptcy. So I have watched with special interest as Borders has tried to sell its customer data to help pay back creditors – what the company calls “one of its main assets.”
After requesting a delay to review privacy concerns, a judge approved this week the $13.8 million sale of the personal data to Barnes & Noble after B&N agreed to provide an explicit “opt-out” opportunity for customers on the list, which B&N initially called unreasonable. B&N will send emails to all customers and post an ad in USA TODAY announcing the opt-out opportunity.
As one of their 48 million customers, I can only wonder what information they have on my family and me from the past 20 years. While I am thankful the 1988 Video Privacy Act will prevent Borders from selling any information on videos I may have purchased from them, no law exists to protect the even more revealing history of my book and magazine purchases (and good luck sorting out which I bought for myself and which as gifts). And, like most busy people, I will probably miss the chance to opt out because it just won’t be convenient enough for me to do.
So what should happen to “customer data” when a company is sold or goes out of business? What if that company were not just a bookstore but Facebook, Google, Twitter or LinkedIn? What if the buyer were not a reputable company like B&N but one of the growing number of data brokers whose sole business is exploiting customer data for their own financial gain? This doesn’t even consider theft, which is exactly what Borders has claimed in a lawsuit against its online rewards partner Next Jump because it used Borders’ data to solicit their customers to make a jump to its own OO.com reward site.
Given the amount of data being collected these days, and the fact it is becoming a more and more valuable “asset,” visionary companies should be thinking of entirely new and transparent ways to engage their customers in sharing and using their data. Otherwise they will increasingly find “opt-out” as the default response.