FTC Penalizes Failing E-Tailer

SAN MATEO (07/10/2000) - Exercising its authority to hold Web sites accountable to their own stated privacy policies, the U.S. Federal Trade Commission on Monday pounced on toy e-tailer Toysmart.com Inc., charging the company with selling personal data about its customers.

The FTC hammered the company for selling consumer data after promising not to do so.

"Even failing dot-coms must abide by their promise to protect the privacy rights of their customers. The FTC seeks to ensure these promises are kept," said FTC Chairman Robert Pitofsky.

Waltham, Mass.-based toysmart is now in bankruptcy proceedings.

The FTC announced that it has filed a complaint against the company with the United States District Court for the District of Massachusetts to keep Toysmart.com from selling the data.

The commission said that toysmart collects detailed data including the names, addresses, billing information, and family profiles including the names and birth dates of children.

Because toysmart has had a posted privacy policy that said the company would not sell the data to third parties, FTC said it will hold toysmart to that promise even though it went out of business on May 22.

Jennifer Jones is an InfoWorld senior editor.

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