Business Security Technology

RadioShack Facing Tough Legal Battle Regarding User Data Auction

RadioShack is facing a tough legal battle regarding its plans to sell its consumer information to pay its creditors after bankruptcy. RadioShack, the famous electronics retailer which filed for Chapter 11 bankruptcy back in February is still persisting that it will sell the user data as it is a major asset of the company. State of Texas is vehemently opposing the auction of personally identifiable information (PII) of around 100 million RadioShack customers. The state has ordered U.S. Bankruptcy Court for the District of Delaware to find out the details regarding the customer information which RadioShack intends to sell. But RadioShack is unmoved despite of the stir that rattled the media after its decision to sell user data, which clearly puts private information of millions of its customers out in the public.

RadioShack has asked the bankruptcy court for the approval of second round of its auction, which will include the auction of consumer data.

In the first round of auction, RadioShack sold 1,700 of its stores to the famous hedge fund Standard General, which is one of the creditors of RadioShack.

Texas Attorney General Ken Paxton filed a petition in the court on 1st April, arguing that RadioShack’s decision to sell user data clearly contradicts the promises it made with its consumers.

“We urge RadioShack to make a blanket vow that it will live up to the assurances it provided 117 million customers and entirely rule out any such sale in the future,” said Paxton.

RadioShack’s privacy policy written on its official websites clearly states that the company will not use the personal information of its customers for any purpose other than the business and services in which the company deals.

“Information about you specifically will not be used for any purpose other than to carry out the services you requested from RadioShack and its affiliates. All of our affiliates have agreed to maintain the security and confidentiality of the information we provide to them,” claims RadioShack in its online privacy policy statement.


Last Month, the bankruptcy court ordered the appointment of a consumer privacy ombudsman to look further into the details of a possible sale of PII by RadioShack. RadioShack vowed to assist and work with the ombudsman.

It is also important to note that RadioShack hasn’t declared officially about its plans to sell its user data, but the company silently listed the customer information as its asset during auction. This is also stated on the Hilco Streambank’s website, the intermediary for RadioShack.

RadioShack’s plans to sell user data and get money to pay its creditors are hard to be achieved, keeping in view the massive user data privacy awareness and campaigns in the modern tech industry. Texas is not the only state giving tough time to RadioShack. Last month, New York’s state Attorney General Eric Schneiderman announced that his office will take necessary action if RadioShack attempts to sell the private data of millions of users.

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