Client Alert: Transferring Customer Data in an Asset Sale

Be careful what you’ve promised your customers … or what has been promised about data you buy!

In today’s world, consumer data is a huge asset for companies across all industries, in particular those in technology-focused spaces like social media, apps, wearables, and retailers involved in e-commerce. The value of such data, however, is at least partly dependent on the extent to which the data can be transferred to third parties without restrictions on use. The ability of a company to sell or otherwise transfer its consumer data, whether in a merger, acquisition or otherwise, typically ties back directly to statements made in the company’s privacy policy. As illustrated by RadioShack’s recent bankruptcy sale, the latest in a series of high-profile examples over the years on this topic, promising not to share consumer information can create a significant obstacle for future asset sale transactions.

For more information, check out our Client Alert.