Toysrus.com, NJ Privacy Settlement Likely Moot
Toysrus.com partnered with Amazon.com in mid-August 2000 to outsource its site development, order fulfillment and customer service -- tasks that proved troublesome for Toysrus.com during the previous holiday season.
As a result, Toysrus.com customers are now required to also surrender their personal information to Amazon.com and are in turn subject to both privacy policies.
And as long as Toysrus.com makes its relationship with Amazon clear, it has nothing to worry about, said Marc Roth, an Internet marketing attorney at New York's Brown Raysman Millstein Felder & Steiner LLP.
"If a Web site intends to share information with third parties it's advised to also include in their privacy policies that once they share information with a third party they won't be responsible for any use thereof," he said.
Toysrus.com and New Jersey settled the investigation without litigation and without Toysrus.com admitting to any misconduct.
"We agreed to pay $50,000 to the state to be used for consumer education regarding Internet privacy as well as covering the cost of the inquiry," said Jeanne Meyer, vice president of corporate communications at Fort Lee, NJ-based Toysrus.com Inc., a privately held subsidiary of Toys "R" Us Inc., Paramus, NJ. "Under the agreement we also agreed to make changes including making the links to the Toysrus.com and Babiesrus.com privacy policies more prominent."
According to Roth, the settlement with New Jersey will not have any bearing on the class-action suits since no litigation took place.
"It appeared that the parties felt it was in everyone's best interest to settle," he said. "Particularly, New Jersey may not have wanted to litigate and Toysrus.com felt that the proposed settlement terms would be fair or more favorable than pursuing litigation to resolve the matter."
However, the outcome of class-action suits is of greater interest to Roth.
"No one has yet to figure out what the injury is to a consumer for sharing his or her information," he said. "I'm still waiting to see how a court is going to monetize a customer's name."