Saying they are "overreaching and unnecessary," Barnes & Noble, winner at auction of most of Borders Group's intellectual property assets, yesterday filed strenuous objections in bankruptcy court to several recommendations made by Michael St. Patrick Baxter, a consumer privacy ombudsman who was asked by the court to address privacy issues in the matter. "Implementing all of the recommendations contained in the CPO Report would destroy the value of the transaction," B&N said. The court is scheduled to address the IP auction today.
Among sticking points for B&N: a recommendation that B&N obtain opt-in consent from people on the Borders list since before May 27, 2008, to be able to transfer their information, which B&N said, "effectively means the information would not be transferred to Barnes & Noble (as it is completely unrealistic to expect customers to affirmatively respond to a request from Borders, a company that has gone out of business)." It also called having different privacy policies for different groups on the list "administratively difficult, if not impossible." B&N would accept an opt-out provision, but doesn't think it's necessary for the 31% of Borders customers who are already B&N members and have accepted its privacy policies.
The other point involves potentially sensitive movie purchases. B&N said it accepts that it not be provided the titles of videos bought by Borders customers but objects to the "exclusion of genre information and other details, which it needs so that it may best serve the needs of its customers." It noted that neither B&N nor Borders have sold videos in genres "considered pornographic or particularly sensitive."
B&N said that it didn't see the privacy recommendations until after the auction was concluded and said "the withholding of that information was not appropriate, significantly altered bid dynamics, and ... the proposed restrictions would materially reduce the value of the customer list."
B&N also said that "the protection of privacy and security of personal data is an important priority" for it and argued, "Having these assets sold to a highly reputable U.S. company engaged in the same line of business as Borders and with a comparable privacy policy should provide a high degree of comfort to the Court, applicable regulatory authorities and customers, both in its own right and when contrasted to other potential U.S. or overseas purchasers not engaged in the same line of business and that may not have the same high degree of commitment to privacy as Barnes & Noble."
