XY Mag to Destroy Rather Than Share Personal User Info

By Steve Smith
08/16/2010

A tussle over the remaining assets of defunct XY magazine has ended in an agreement to protect the identities of former customers of the gay lifestyle and dating properties. After XY declared bankruptcy recently, the business partners fought over ownership of the assets, including the identities and personal information of over one million users. Under the original privacy policy under which people joined the dating and content site, members were assured that their personal information would not be shared with a third party under any circumstances. The Federal Trade Commission weighted in recently, warning that transferring private information from the property would violate the privacy agreement and might constitute deceptive trade practices.

An agreement between the two parties has resolved the issue without litigation. The publisher has agreed to destroy the personal information.

The agreement highlights an important issue that sits below the surface of the digital economy. As companies close and buy and sell to one another, the fate of the valuable user data everyone holds becomes an issue. Most privacy policies are unclear about this issue or do allow for transfer of personal information to new owners. But as the tracking and ad targeting technologies online become more sophisticated, user profiles will be come denser and more valuable. M&A online could be informed in part by the value of the user data a media company holds, so establishing some legal precedents for their transfer among companies will be important.