Data privacy is an undeniably hot-button issue. Be it unfettered government access, data breaches by mass-market retailers or sneaky advertising practices on social media, the public is concerned about what is happening to their private information and rightly so. With this increasing scrutiny, it is vital that a business takes great care to comply with the practices described in its own privacy policy. Even a business that is undergoing a merger, acquisition or dissolution must consider the privacy representations it has made to its users and ensure its continued compliance.
This issue emerged when education technology company ConnectEDU tried to sell substantially all of its assets, including 20 million personal student records, in a Chapter 11 bankruptcy proceeding. However, the Federal Trade Commission intervened before ConnectEDU could proceed with its asset sale to North Atlantic Capital, a capital venture company. The basis for the FTC’s objection rested on ConnectEDU’s alleged failure to adhere to its privacy policy, which states: “In the event of sale or intended sale of the company, ConnectEDU will give users reasonable notice and an opportunity to remove personally identifiable data from the service.”
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