Borders Customers Will Have to Opt Out After Barnes & Noble Acquires Database

After arguing in court over privacy concerns from the sale of bankrupt Borders' customer loyalty database to Barnes & Noble, the lawyers in the case agreed to email customers and give them 15 days to opt out of the system.

According to a Reuters report, the parties also plan to "split the cost of an advertisement in USA Today giving customers information on how to opt out." Barnes & Noble's own privacy policy will govern the information once it is transferred, has agreed to purge any information it deems unnecessary.

The database reportedly contains information regarding 48 million customers, including millions of names, addresses, phone numbers and emails.

Barnes & Noble had an almost $14 million deal in place for Borders' intellectual assets including customer information at auction last week, but the judge held up the deal until privacy concerns could be addressed. Barnes & Noble said it should not have to comply with certain customer privacy standards recommended by a third-party ombudsman. In court papers, Barnes & Noble said that its own privacy standards are sufficient to protect the privacy of customers whose information it won during the auction.

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At the heart of Barnes & Noble's disagreement is the court appointed Consumer Privacy Ombudsman Michael St. Patrick Baxter of the Washington, DC law firm Covington & Burling's requirement that any use of Borders consumer information would require consent.

According to Reuters, St. Patrick Baxter, said he supports the latest terms and that he has not received any objections from the Federal Trade Commission or from state attorneys general.

The Federal Trade Commission had said in a letter to St. Patrick Baxter's office that recommended that any transfer of personal information in connection with a bankruptcy sale take place only with consent of Border's customers or with significant restrictions on the transfer and use of the information.

Follow Michael Cooney on Twitter: nwwlayer8

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