Disposal Of Customer Lists On Insolvency
The customer database can be an online business' most valuable asset. On insolvency the liquidator may wish to realise the asset by sale to a third party. However there is a conflict between this objective and EU data protection legislation which Data Protection.operates to prevent data transfers without adequate privacy protection. The UK Data Protection Commissioner is frequently consulted on this topic and has indicated that she is drawing up guidelines on the sale of personal databases by insolvent businesses.
In June 2000 the liquidators of boo.com sold its database of customers to a US company. This sale was unlawful under the Data Protection Act 1998 as boo.com did not have permission from its customers to share their data with third parties and the United States did not satisfy the adequate level of protection standard for data exports to non-EEA countries. The purchaser has now been required to contact each of the customers to ask
