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Worst privacy practices raises the stake on privacy to new heights.

I remember being totally appalled when I heard that would sell its database of users and credit card numbers to the highest bidder, despite published policies protecting users from this. Fortunately, at the urging of TRUSTe, the Federal Trade Commission (FTC) stepped in and threatened to sue if Toysmart followed through with its idea of liquidation that included assets protected by its privacy policy. The FTC’s threat was effective: Toysmart’s database was buried with the remains of the dead dot-com.

Now it seems–a charter member of TRUSTe–wants to sell its database of 170,000 users, including political affiliations and zip codes, at auction, according to a story in last week’s Los Angeles Times. When TRUSTe threatened to sue, the two companies reached a tentative agreement: Whomever buys’s database must allow past visitors to take themselves off the list, according to a recent AP story, also posted on

First of all, we have a trend here. As dead dot-coms liquidate, their investors are demanding that everything of value be sold, including sensitive, private data. This is just plain wrong. This information is not like computers and chairs. It’s protected by contract.

Second, as the trend continues, it is clear TRUSTe is not strong enough to prevent these sales, especially by companies that don’t register with the privacy group. Even if they are registered, as in this case, TRUSTe may be forced to compromise:’s opt-in privacy policy suddenly became an opt-out clause. And who will police the buyer in how it goes about asking’s visitors to opt out?

Third, and most disturbing, is the information being sold. While names and credit card numbers are traded on us daily by our most trusted financial institutions, I know of no group that trades in political affiliation. And zip codes are the key piece of information marketing firms need for junk-mail marketing. All the buyer needs to do is cobble together a couple more of these databases and suddenly all visitors are targets of a direct political machine the likes of which we have not yet seen.

My hope is that the FTC gets involved again, not only going after’s investors, but pushing the matter before Congress. It’s clear we need a law banning these kinds of database liquidation sales.

James Mathewson is editorial director of and ComputerUser magazine. Check out his monthly Stocks column in ComputerUser magazine.

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