Apple Objects to Customer Information Being Included in Sale of RadioShack Assets

[MacRumors]

After filing for Chapter 11 bankruptcy back in February, confusion began to swirl surrounding the future - or lack thereof - regarding RadioShack's brand name and the sensitive customer data the tech seller has accumulated over the years. Yesterday, the auction for those assets ended and New York-based investment firm Standard General came out on top, winning the brand with a $26.2 million bid.

Last week, as bidding went underway for the bankrupt company's IP and data, Apple chimed in with a filing of its own at the bankruptcy court in Wilmington, Delaware where the proceedings were underway (via Dallas Business Journal).

Apple's objections note that RadioShack was not holding up its end of a previous reseller agreement made between the two companies that would prevent the retailer from the selling of Apple customer information. The Cupertino company went so far as to say that that information does not fall within RadioShack's estate, meaning anyone who buys the company - namely Standard General - has no right to access any of that sensitive data.

Apple isn't the only objector to the sale of customer data, with AT&T reaching a settlement with RadioShack and any "purchaser of its assets" to prevent the bankrupt company from the selling, disclosure, or transferring of AT&T's protected information. The state of Texas itself filed an objection in March, claiming the sale of customer data should be prevented as it violates the Texas Deceptive Trade Practices Act and basic consumer protection laws set in place within the state.

Frances Smith, a law partner at Dallas-based Shackelford, Melton, McKinley & Norton, LLP, believes the disruption by the complaints set against RadioShack's consumer data sale could prevent the sensitive information from being included in the auction, and possibly even shift the true price of RadioShack's estate and assets at auction.

"What could happen is the judge approves the sale of everything or approves the sale with the carve out for the customer info," She said. "I don't think there's a scenario where he just doesn't approve the sale because there are a lot of other things going on."

Although it has the winning bid, Standard General isn't out of the woods yet. The judge overseeing the case still needs to grant approval of the bid for the hedge fund to truly take over the RadioShack IP and any estate deemed fit by the court to be properly under the now-defunct company's ownership. This includes that sensitive customer data Apple and the other companies are worried about, which boils down to about 67 million physical addresses and 8.5 million email addresses, as AppleInsider points out. The hearing regarding all of these claims is set for next week on May 20.

Article Link: Apple Objects to Customer Information Being Included in Sale of RadioShack Assets

 

[AdonisSMU]

Wow! Radio Shacks price just got cheaper.

 

[iConnected]

I'm sure the legalities are complicated.

But from a layperson's perspective it seems clear that, if there was an agreement between Apple and Radio Shack to prevent the latter from selling Apple customer information, then that agreement should stand.

Cue lots of lawyers earning megabucks to establish the obvious?

 

[jlc1978]

It will be interesting to see how this plays out. Given a bankruptcy court's latitude in voiding contracts will they deem the agreements void in order to extract maximum value form the remains of Radio Shack? I think it would be hard to argue that the customer information should be treated any differently than any other asset RS owns, and thus not subject to sale.

 

[AdonisSMU]

It will be interesting to see how this plays out. Given a bankruptcy court's latitude in voiding contracts will they deem the agreements void in order to extract maximum value form the remains of Radio Shack? I think it would be hard to argue that the customer information should be treated any differently than any other asset RS owns, and thus not subject to sale.

Then how much would Apple get out of such a deal? Presumably if you violate an agreement then you have to pay. Apple obviously doesn't care about the money they care about their information like the others but how much of that 26 million would they get?

 

[knemonic]

I always hated you had to give radio shack your address, micro center is like that too, leave me alone you weirdos.

 

[KPOM]

It will be interesting to see how this plays out. Given a bankruptcy court's latitude in voiding contracts will they deem the agreements void in order to extract maximum value form the remains of Radio Shack? I think it would be hard to argue that the customer information should be treated any differently than any other asset RS owns, and thus not subject to sale.

I am not a lawyer, but I think the court's ability to void contracts deals mostly with transfers of assets in the weeks and months leading up to a bankruptcy. IOW, they want to discourage creditors from "inducing" debtors to make favorable payments to them before a bankruptcy filing.

In this case, it appears to be what rights RadioShack had to that information. If Apple gave RadioShack access to customer information for the purpose of a joint campaign, then it can place contractual restrictions on that data, both for economic reasons, and to comply with its own privacy policies.

 

[Waxhead138]

From the consumers' standpoint...if I chose to provide my info to a specific entity...that was the choice I made then, with that entity. It somehow doesn't seem fair to me that it should automatically change hands just because someone bought a brand name. Especially if in essence that was half the reason someone bought the brand name. Or, which is kind of the point of the article....if prior agreements were made between said entity and other parties...the new owner should have to honor those agreements. That part to me is a no brainer.

I know this is a complicated topic...and the above overly simplistic to a point. It just seems like a very shady way to obtain info to purposely / possibly exploit that info.

If nothing else, existing prior corporate agreements need to be kept satisfied. A new purchase shouldn't just erase those agreements, especially regarding customer privacy.

Thanks Apple for putting up a fight at least.

 

[Mr Fusion]

OMG THEY GOT MY ZIPCODE!!!!!!

 

[zaphon]

Should actually be interesting. As I would bet that the contracts Apple, AT&T, etc. had barred the outright sale of the data (for spam purposes etc.). However the selling of the assets including the brand name I'm not sure would fall under that. It will all come down to the language of the contracts and the judges interpretation of them.

 

[jscooper22]

Oh no. They'll know how many batteries I bought when I lived in 90038.

 

[xgman]

OMG THEY GOT MY ZIPCODE!!!!!!

In a lot of cases they have way more than that. They are basically buying a marketing list for electronic consumers.

 

[MasterRyu2011]

I always hated you had to give radio shack your address, micro center is like that too, leave me alone you weirdos.

You're telling me if you went into Microcenter to buy a power supply you cannot walk out of there without them having your address? Serious question.

 

[Four oF NINE]

I think Apple has a strong point for objecting here.

 

[Thunderhawks]

I always hated you had to give radio shack your address, micro center is like that too, leave me alone you weirdos.

What's wrong with giving anybody who you think shouldn't have your address a wrong address? 35 Miller Street sounds as good as any.

Same for businesses which request SSNs. I don't see why car rental guys etc. should have that or anybody who is non government, bank etc.

Just reverse two digits within your SSN and if somebody really makes use of it you will hear from them.

That is better than having to argue with a sales clerk who just follows "procedures" from some bean counter.

Haven't had a call in over 30 years of doing that, i.e. it is unimportant info
to corporations. Just info collection disease.

 

[HenryDJP]

What's wrong with giving anybody who you think shouldn't have your address a wrong address? 35 Miller Street sounds as good as any.

I would say the only benefit in giving them the correct address would be in case you lose your receipt and need to return a product for a full refund. They may want to at least verify your address on your identification.

 

[Mascots]

That's where a large chunk of the money in Radioshack's asset catalogue is. I bet the purchaser will fight hard to keep those records.

 

[flavell]

Radio Shack Data Mining

I always refused to give Radio Shack employees my info -- I came in for a
pair of AA batteries, not to apply for a mortgage. If they insisted, I gave them
a false address, false phone number, false DOB, whatever -- as I do
with all retailers collecting data to sell. I told one kid my name was Michael J. Mouse, and my address was Disney World, Orlando, Florida. He duly recorded the information.

 

[l00pback]

I always hated you had to give radio shack your address, micro center is like that too, leave me alone you weirdos.

You're telling me if you went into Microcenter to buy a power supply you cannot walk out of there without them having your address? Serious question.

No. When the associate asks you "What's your phone number?" you simply say "No, thank you." I don't know about Microcenter, but I have to guess it's the same there. If they insist, you put down the merchandise and walk out.

Former RadioShack employee here.

 

[HobeSoundDarryl]

Sad to see the shack go. A lot of what they carried is not readily available anywhere else LOCALLY. Sure, you can probably get about anything they stocked online and cheaper, but then you wait for UPS, Fedex and so on. In a pinch, the shack could deliver uncommon stuff without delay. Sad to see them go.

 

[HenryDJP]

Sad to see the shack go. A lot of what they carried is not readily available anywhere else LOCALLY. Sure, you can probably get about anything they stocked online and cheaper, but then you wait for UPS, Fedex and so on. In a pinch, the shack could deliver uncommon stuff without delay. Sad to see them go.

Yeah at much higher prices. I only viewed Radio Shack as the 7-11 of electronics. Convenient, yes, but they knew that and they were not competitive with pricing. Had they been they could've easily expanded and competed with Best Buy or Fry's. It's their own fault. They've been around too many years before Best Buy.

 

[Thunderhawks]

I would say the only benefit in giving them the correct address would be in case you lose your receipt and need to return a product for a full refund. They may want to at least verify your address on your identification.

My guess is that 99% of consumers pay for larger purchases with some kind of a credit/debit card.

No address on that receipt and one can request them from the cc company if really needed.

If I pay cash and have to show my license with a different address than what they have on file: I just moved !

Anyway, I am always shocked how easily people give out their real info to businesses who don't need it and should not have it.

As for Radio Shack , it annoyed me enough to buy cash and every time they asked me for my name to put some info into their systems, I said: Johnny Cash.

Sad and classic case where a business didn't see the signs of the time and
had the rug pulled out from under them.

 

[Truffy]

The state of Texas itself filed an objection in March, claiming the sale of customer data should be prevented as it violates the Texas Deceptive Trade Practices Act and basic consumer protection laws set in place within the state.

I'm surprised that this is even in doubt. If, as a past RS customer, my personal data were to be sold to Idontknowwhat Corp, I'd be mighty pissed.

 

[britboyj]

Can I object? Where can I object?

 

[Thunderhawks]

Yeah at much higher prices. I only viewed Radio Shack as the 7-11 of electronics. Convenient, yes, but they knew that and they were not competitive with pricing. Had they been they could've easily expanded and competed with Best Buy or Fry's. It's their own fault. They've been around too many years before Best Buy.

Agreed, they had plenty of time to change their business model. Could have studied digi-key an converted their business to online.

The few geeks who needed a capacitor pronto, would just have to plan better

----------

No. When the associate asks you "What's your phone number?" you simply say "No, thank you." I don't know about Microcenter, but I have to guess it's the same there. If they insist, you put down the merchandise and walk out.

Former RadioShack employee here.

Why, if you wanted the merchandise?

Simple answer:

Area code -359-2680 or pick any number.

He's not gonna call you right then. (BTW: You would not be home

My take is that they have no right to your info, so anything you give is fine