Most of us are not fully aware of the privacy policies and rules that go into effect if a company sold is sold or goes into bankruptcy. Suppose we signed up for a Web site that had specific restrictions on how our personal information could be used, such as not providing it to a third party. Do these restrictions remain if the company is bought by another firm?

Not surprisingly, our privacy rights are not as strong as they should be in these situations. Therefore, we need to give out personal information very carefully — and monitor its use.

As Natasha Singer and Jeremy B. Merrill recently reported for the New York Times:

“The privacy policy for Hulu, a video-streaming service with about nine million subscribers, opens with a declaration that the company ‘respects your privacy.’ That respect could lapse, however, if the company is ever sold or goes bankrupt. At that point, according to a clause several screens deep in the policy, the host of details that Hulu can gather about subscribers — names, birth dates, email addresses, videos watched, device locations, and more — could be transferred to ‘one or more third parties as part of the transaction.’ The policy does not promise to contact users if their data changes hands.”

“Provisions like that act as a sort of data fire sale clause. They are becoming standard among the most popular sites, according to a recent analysis by the New York Times of the top 100 Web sites in the United States as ranked by Alexa, an Internet analytics firm. Of the 99 sites with English-language terms of service or privacy policies, 85 said they might transfer users’ information if a merger, acquisition, bankruptcy, asset sale, or other transaction occurred, the Times’ analysis found.  The sites with these provisions include prominent consumer technology companies like Amazon, Apple, Facebook, Google and LinkedIn, in addition to Hulu.”

 
Click the image to read more from the NY Times.
 

 

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