Why Barnes & Noble Was Able to Get Your Borders Data

NEW YORK (MainStreet) – During the past few months, Borders email subscribers have seen some interesting communications from the company. Earlier in the year Borders Rewards members received an email from the company’s CEO, Mike Edwards, informing them that the retailer would file for bankruptcy and close many stores. A few months later, after the company failed to find a buyer, he sent another email announcing that Borders would shut down permanently.

These were strange missives to receive on a mailing list usually reserved for bombarding subscribers with news of sales and special discounts. But undoubtedly the weirdest moment came this weekend, when subscribers got an email from William Lynch – better known as the CEO of Barnes & Noble, one-time competitor of Borders.

Borders liquidated its assets as it prepared to close its doors, and in addition to selling off the chairs and bookshelves, it also sold off its list of email subscribers to the highest bidder. Lynch’s email informed former Borders customers of this fact, and also made it clear that they had every right to opt out and be removed from the list. The company was, to its credit, very upfront with customers in giving them an easy way to get off the mailing list.

Still, some customers were taken aback at the fact that Borders had sold data to a third party, something that many retailers promise never to do. Indeed, a look at an archived version of Borders’s old privacy policy makes it very clear that “[Borders does] not rent or sell your information to third parties.”

However, that privacy policy has evolved over time. As the Federal Trade Commission points out in a letter raising concerns over the sale, Borders amended the language of its policy in 2007 to include the proviso that “Circumstances may arise where for strategic or other business reasons, Borders decides to sell, buy, merge or otherwise reorganize its own or other businesses… In the event that Borders or all of its assets are acquired in such a transaction, customer information would be one of the transferred assets.”

The FTC’s letter, penned by Bureau of Consumer Protection Director David Vladeck two weeks before the sale was finalized, argued that this provision only applied to situations in which Borders was acquired by another entity and continued operating as a retailer – not a liquidation of assets, as was the case. Still, it’s hard to argue that Borders didn’t cover its bases here, and Barnes & Noble has likewise taken appropriate steps by giving customers two weeks to opt out and even taking out a full-page ad in USA Today informing former Borders customers of the situation.