Legal and privacy issues surrounding customer databases and e‐merchant bankruptcies: reflections on Toysmart.com

From a consumer perspective, the issue of personal, informational privacy is of growing concern as our society becomes more and more digitized. For businesses however, detailed customer information is a valuable and lucrative commodity. The latter is particularly true for online businesses with few tangible assets. In order to allay consumer privacy fears, some online businesses post privacy policies promising not to divulge customer information. Yet, when an online business files for bankruptcy, creditors will demand that the customer database be sold with other assets. This article examines the legal and privacy issues surrounding customer databases that arise when an online business files for bankruptcy