TRUSTe Seeks Public Comment on Privacy Guidelines for Companies Undergoing Mergers, Acquisitions and Bankruptcies

Consumers, Policy Makers, Businesses, Venture Capitalists, Privacy Advocates

And Others Asked to Comment on Draft Guidelines via TRUSTe Web Site

Apr 11, 2001, 01:00 ET from TRUSTe

    SAN JOSE, Calif., April 11 /PRNewswire/ -- TRUSTe, the global privacy seal
 program, today released draft privacy practice guidelines for companies
 undergoing mergers, acquisitions and bankruptcies.  Beginning immediately,
 TRUSTe is seeking public comment for its guidelines, which can be viewed on
 its Web site at
     These guidelines come at an important time as many companies seek guidance
 on appropriate uses of personal information when faced with business
 transitions. The guidelines, rooted in the TRUSTe license agreement contract,
 outline acceptable uses of information that protect privacy by giving
 consumers full control over their personal information. Specifically, the
 guidelines point to the following:
     -- Mandated Third Party Oversight -- The guidelines state that personal
     information transfer requires third party oversight as an important check
     against the singularly focused demands imposed by creditors.
     -- Consumer Notice and Choice -- Recommending Opt-In as a method to
     retain full value of a customer database and extend trust to new users,
     TRUSTe's guidelines illustrate methods and scenarios for giving consumers
     notice and choice of a change in privacy practices.
     -- Privacy Policies Must be Honored -- The same privacy promises a
     company makes while in business, must be honored when going out of
     business. To that end, both parties -- the buyer and the seller -- have
     an obligation to the consumer.
     "Our goal with these guidelines is to strike a reasonable balance between
 consumer privacy rights and expectations and the business need to realize the
 full value of corporate assets," said Bob Lewin, President and CEO of TRUSTe.
 "In an economy valued by information, customer data is like gold and, as such,
 deserves enhanced protection."
     Today's news comes in the wake of increased attention to the privacy
 problems faced during the bankruptcy process. During the Summer of 2000,
 TRUSTe-licensee announced intentions to sell its customer
 database as part of its bankruptcy filing. TRUSTe raised immediate objection
 to this intended move by alerting the Web community. As a result, more than
 40 state attorneys general and the Federal Trade Commission followed suit to
 block the sale of's customer database. Never sharing personally
 identifiable information with a third party, ultimately settled
 with a buyer who agreed to destroy the database. Subsequently, many companies
 have asked for guidance on the bankruptcy issue and, in Congress, privacy
 language has emerged in the Bankruptcy Reform Act of 2001.
     Added Lewin, "From the writing of the business plan through each of a
 company's evolutionary steps, privacy must be top-of-mind throughout a
 company's lifespan. Clearly, privacy is not just an issue for advocates and
 policy makers; rather, it has become a fundamental concern among creditors and
     TRUSTe's guidelines will be posted on TRUSTe's Web site for a 60-day
 public comment period, after which TRUSTe will distribute a final version to
 the general public and its privacy seal program licensees. TRUSTe is
 interested in hearing comments from consumers, businesses, policy makers,
 advocates and the financial community.
     About TRUSTe
     TRUSTe, the leading privacy seal program, is an independent organization
 dedicated to building consumer trust and confidence in the Internet. The
 TRUSTe coalition of participating companies includes America Online,
 Excite@Home, Intel, Intuit, Japan Engineers Federation and Microsoft. Founded
 in 1997, TRUSTe is the premier privacy seal program worldwide. The TRUSTe seal
 is currently displayed on all of the Internet's portal sites and has been
 rated by Cheskin Research as the most trust-invoking seal online. Since the
 summer of 1999, Nielsen//NetRatings has continuously rated TRUSTe as the most
 visible symbol on the Internet. Today, the TRUSTe maintains the largest
 privacy seal program with nearly 2,000 Web sites certified throughout the
 world. TRUSTe is based in San Jose, CA, with an office in Washington, DC. To
 learn more about protecting your privacy online, visit the TRUSTe Web site at