The FTC’s letter recommended than any transfer of personal information take place only with the consent of Borders’ customers or with significant restrictions on the transfer and use of the information. The Report also cited to letters the ombudsman received from 25 State Attorney Generals and the FTC expressing concern over the transfer of personal information in connection with the sale. Borders’ first privacy policy, published in 2006, provided that it will “only disclose email address or other personal information to third parties if you expressly consent to such disclosure.” (emphasis in original text) The Report recommended, among other restrictions, that B&N obtain the affirmative consent of affected consumers before transferring the personal data and that it treat consumer information pursuant to Borders’ privacy policy in effect at the time of its collection. The sale of those assets hit a potential roadblock on Thursday, though, when a New York bankruptcy judge refused to approve the transaction, saying that he needed more time to think about the potential privacy concerns. This decision came on the heels of a Report issued by a court-appointed ombudsman who recommended certain privacy restrictions to be taken with respect to the customer information. On September 15, Barnes & Noble (“B&N”) acquired several of Borders’ intellectual property assets, including a database of customer information, as part of Borders’ bankruptcy auction.
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