The U.S. Bankruptcy Court in Massachusetts today denied a motion by Waltham, Mass.-based Toysmart.com to approve a settlement the company reached with the Federal Trade Commission (FTC) last month to sell its customer data.
Judge Carol Kenner put off a final decision on whether the customer list may be sold in the future and, if so, whether restrictions would be imposed.
"The decision is a victory for consumers and everyone interested in Internet privacy," Massachusetts Attorney General Tom Reilly said in a statement today.
The settlement reached last month by Toysmart and the FTC would have allowed Toysmart to sell the information to a "successor company" that plans to buy Toysmart's entire Web site and business. Under the terms of today's ruling, any specific offer to sell the data will have to go back to the court for approval.
Toysmart.com went out of business in May and filed for bankruptcy protection in June.