Apple intervenes in Radio Shack sale in effort to protect customer data
Bidding for the RadioShack brand and customer data has ended, but not before Apple weighed in on the proceedings, saying that information collected during the sale of its own products should be left out of the deal.
The hedge fund Standard General was the top bidder with $26.2 million for RadioShack's brand name and customer data. The same firm bought out Radio Shack's 1,700 store leases in March, as noted by Bloomberg.
But as the bidding process was underway in a Delaware bankruptcy court, Apple joined the proceedings with a filing of its own. Specifically, the iPhone maker argued that its agreements with RadioShack prevent customer data obtained from those buying Apple products from being resold.
In order to gain an Apple reseller agreement, RadioShack allegedly waived any rights to the data of customers who bought Apple products, as detailed by Law360.
"In order to protect its customers' personal information, Apple oversees the collection and use of customer information collected by its retail partners, including RadioShack," Apple's filing with the court reads. "The reseller agreement between Apple and RadioShack protects information collected by RadioShack regarding purchasers of Apple products and prohibits the proposed sale of such information."
Also joining was AT&T, who said that RadioShack "seemingly intends" to sell information obtained during the sale of AT&T devices.
The judge overseeing the case must still approve Standard General's bid for RadioShack, as well as the exchange of accompanying customer data, including some 67 million physical addresses and 8.5 million email addresses. A hearing has been set for May 20.
U.S. Bankruptcy Judge Brendan L. Shannon did say last month that he would not approve the sale of any customer data he finds to be impermissible.
The demise of RadioShack brings to an end a store that once catered to technology enthusiasts and hobbyists with hard-to-find gadgets, components and accessories. But as the retail space changed, and enthusiasts increasingly went online to buy products at inexpensive prices, RadioShack attempted to adapt and become primarily a smartphone reseller.
That plan failed, however, leaving RadioShack with two straight years of losses and headed to bankruptcy court. Trading of the Texas-based company's stock was suspended on the New York Stock Exchange in February.
The hedge fund Standard General was the top bidder with $26.2 million for RadioShack's brand name and customer data. The same firm bought out Radio Shack's 1,700 store leases in March, as noted by Bloomberg.
But as the bidding process was underway in a Delaware bankruptcy court, Apple joined the proceedings with a filing of its own. Specifically, the iPhone maker argued that its agreements with RadioShack prevent customer data obtained from those buying Apple products from being resold.
In order to gain an Apple reseller agreement, RadioShack allegedly waived any rights to the data of customers who bought Apple products, as detailed by Law360.
"In order to protect its customers' personal information, Apple oversees the collection and use of customer information collected by its retail partners, including RadioShack," Apple's filing with the court reads. "The reseller agreement between Apple and RadioShack protects information collected by RadioShack regarding purchasers of Apple products and prohibits the proposed sale of such information."
Also joining was AT&T, who said that RadioShack "seemingly intends" to sell information obtained during the sale of AT&T devices.
The judge overseeing the case must still approve Standard General's bid for RadioShack, as well as the exchange of accompanying customer data, including some 67 million physical addresses and 8.5 million email addresses. A hearing has been set for May 20.
U.S. Bankruptcy Judge Brendan L. Shannon did say last month that he would not approve the sale of any customer data he finds to be impermissible.
The demise of RadioShack brings to an end a store that once catered to technology enthusiasts and hobbyists with hard-to-find gadgets, components and accessories. But as the retail space changed, and enthusiasts increasingly went online to buy products at inexpensive prices, RadioShack attempted to adapt and become primarily a smartphone reseller.
That plan failed, however, leaving RadioShack with two straight years of losses and headed to bankruptcy court. Trading of the Texas-based company's stock was suspended on the New York Stock Exchange in February.
Comments
It's ironic that the most annoying part of any Radio Shack transaction (giving them your credit card, phone number and zip code when you buy a $3 battery at their store) is now the most valuable part of their entire bankrupt retail chain.
yes it very uncommon that a company can bar another company from data they collect on their customers. But Apple has the power to negotiate these kinds of deals. Generally speaking once you sell your product in to Distribution channel and one could argue that Radio Shack along with Best Buy and such are distributors the company putting their products in those channels give up all rights to set price and control over who the customers are.
This shows you how committed apple is to protection peoples information. Google would probably do the same thing, but for different reasons, mainly they do not want others making money off their informations it about profits for Google and other companies.
On a different note, my local Radio Shack happens to be a franchise store and the owners said they all did very well and they are hoping to stay in business and they are looking to buy products directly if all possible so they can stay in business.
Nah, no one would do that.
Now that's interesting. Radio Shack waived the rights to Apple customers' data...I am not familiar with those kinds of agreements. Is this uncommon?
This is uncommon.
But Apple's products are so compelling that Radio Shack had to agree to Apple's terms.
Other manufacturers don't care about their customers as much since after the sale, the customer makes no profit for them, only losses.
He didn't but he usually ducks anything so clearly altruistic by Apple, rather spending hours on the grayer areas more open to the twisting of facts and interpretations.
Yes, and probably always was a major income generator for them, a model picked up and taken to the limits by Google of course.
EDIT: Not off topic nor trolling: Highlighting a sales and marketing policy under discussion and obviously mentioning the king of that policy, that Apple is clearly trying to prevent.
There's actually a similar case from a few years back where the FTC stepped in to prevent the sale of identifiable information when ToySmart went belly-up. That's not the only case either There was intervention in the bankruptcy asset sales of customer data belonging to Borders too. I'll guess the same will happen here even if the bankruptcy judge lets it pass., which I personally don't think he will.
EDIT: Here's a legal paper on it
http://blogs.law.nyu.edu/privacyresearchgroup/2015/03/radioshacks-bankruptcy-and-auctioning-off-customer-data-a-violation-of-privacy-policy/
"RadioShack will press on with its plan to sell its customer data, despite opposition from a number of U.S. states. The company has asked a bankruptcy court for approval for a second auction of its assets, which includes the consumer data."
So hardly 'moot'. No need to try to diminish Apple's excellent attitude.
Why would Google come up? Did you seriously ask that question?
When people are talking about privacy issues then of course Google would come up. They have arguably the biggest treasure trove of data on people of any company out there.
That wouldn't even be so bad ... it's the perpetual attempt to lower every Apple flag that is oh so annoying on this, an Apple blog. How long did you spend on an Android site today lowering their flag at every chance? None I bet! Me neither.
Come on ... that was an intelligent comment ... trying to waste your time?
They should have kept up their battery a month club / battery card
People would have gone in to the stores...
If those few angry Apple fans that can't tolerate any mention of Google or Android or Samsung or Microsoft "on a pro-Apple site" are sincere then why try to bait folks that might not share their views with off-topic mentions and name-calling? Sounds more like they're inviting exactly the kinds of posters and comments they say they hate seeing here. :no:
on other sites.
Those little gadgets, resistors, transistors, and circuit boards fascinated me and led to projects when I was a kid. The iphone generation is left with no actual knowledge about how anything works. There is no local outlet or expertise to mentor little kids into tech careers. 99% of everything taught in public or private schools didn't cover what you would learn with a decent electronics kit from radio shack.
Internet forums, youtube, and electronics stores online are also a great option but they are not visible unless you look for them. Visibility of tech learning opportunities is important and the lack of accessibility will make us no different from third world countries.
Apple should have bought out the shack and run an educational tech enterprise using the existing real estate. Even if it broke even, jobs and opportunities would be created. Where was bill gates billions? Warren buffets billions? Curing malaria I suppose. This radio shack situation is a missed opportunity.
A "store" dedicated to designing electronics hardware, software coding, etc. would stimulate the local economy and provide for the hope of reasonable paying blue collar and white collar jobs of the future. The "poor" are the ones who will be most adversely affected by this. Old school Radio shack is what kids in urban ghettos needed.
I took out the circuit boards in my home furnace this weekend after it burned out. I diagbosed the problem snd ordered the new part. The expertise came from playing with radio shack kits when I was a kid. Knowledge is power. Knowledge is money in your pocket.