If you own an e-commerce or other type of online business, one of your most valuable assets is the information that you've collected about your customers. Like any business asset, you should use it to help you turn a profit. Caution is in order though unless you're
willing to risk having the press mercilessly attacking you. Amazon.com just learned this lesson.
Some will tell you that the Net is like the "Wild West." While it's true in some ways, it's also true that in many ways everybody is watching the Net like a hawk.
While SallysDollShop.com can slide by in a relatively unregulated environment, if you manage a big name website like an Ebay.com or Cnn.com, you're living under a microscope. One false step and the press jabs at you like you're a bull in a bullfight.
Even if you're a lower profile company, you're not off the hook. You still live in a world where negative publicity or even a disapproving customer buzz can cripple your bottom line.
The Amazon Tale
Here's the most controversial part (English translation follows). "As we continue to develop our business, we might sell or buy stores or assets. In such transactions, customer information generally is one of the transferred business assets. Also, in the unlikely event that Amazon.com, Inc., or substantially all of its assets are acquired, customer information will of course be one of the transferred assets."
Simply, this means that if Amazon sells some or all of its business or goes bankrupt, they can transfer whatever it is that they know about their customers to whomever ends up with their assets. So?
It's never been different. Businesses have been buying and selling business assets, including everything they know about their customers, since the first apple cart business changed hands in some place called the Garden of Eden.
Why is it that PC seems to care less about that really annoying telephone call? Could it be that Net businesses get unfair scrutiny?
I'm a consumer too. I don't really want my name in a database along with a comprehensive list of everything I've bought in every drugstore, record store and bookstore this year either.
Still, since the information is digital now and moves at Net speed, prohibiting its flow may be a bit like making it illegal for water to run downhill.
I'll go out on the not PC limb here. I think that what Amazon.com did was reasonable and responsible. Selling their customer list as a part of some future hypothetical sale of assets is just the way it has always worked and will always work.
Amazon.com isn't the evil one here. What they did was fully and frankly disclose a universal business practice.
The bad news is that the law is a bit unclear when it comes to where some of the lines are as to how you can legitimately use your customer's information. At the same time, this same uncertainly is the good news.
The political issue of what the law should be is an interesting question, but not the one your business needs to concern itself with today. For now, work with the broad parameters the law gives you and maximize the value of the information assets you possess. Further, you should closely watch the law, and the outside parameters of PC, as they develop, so that you maximize your profit while not finding
yourself at the ugly end of bad publicity.
He who walks the fine line just right can win this game as the rules quickly evolve.
Mark Grossman's "TechLaw" column appears in numerous publications. Mark Grossman has extensive experience as a speaker as well. If you would like him to speak before your group or corporate meeting, please call (305) 443-8180 for information.
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