Barnes & Noble Email to Borders Customers Rattles Privacy Watchdog

A consumer-privacy watchdog is fuming over a message that Barnes & Noble Inc. executives sent out to millions of former Borders customers who have the next 11 days to decide whether to keep their personal buying history and contact information between them and soon-to-be-ex bookseller.

Consumer-privacy ombudsman Michael St. Patrick Baxter is accusing Barnes & Noble—the grave-dancing bookseller that spent $13.9 million on Borders Group Inc.’s old customer lists—of ignoring important changes in an email that the bookstore sent out to Borders customers last weekend. His editorial tweaks were meant to make it clear that former customers could block the transfer for their contact information and past purchase history to Barnes & Noble.

In court papers filed with the U.S. Bankruptcy Court in Manhattan, Baxter said that Barnes & Noble’s message read more like a generous corporate gesture than a court-ordered disclosure.

“It was clear to the ombudsman that a robust and meaningful opt-out was critical to reaching the negotiated privacy related terms of the sale,” Baxter said in court documents. “(Barnes & Noble)’s failure to provide such relevant and material information in the opt-out notice may defeat the very purpose of the notice.”

Before its bankruptcy, Borders had built up buying information on nearly 48 million customers. Barnes & Noble put in the top auction bid for that information, a proposal that raised eyebrows at the New York Attorney General Office and the U.S. Federal Trade Commission.

Baxter had already given ground on how the customer information transfer should work. Initially, he said Borders customers should give their approval to transfer their information to the buyer, a strong protection that prompted Barnes & Noble executives—who thought they were getting an unrestrained database of information—to nearly walk away from the deal.

The two sides hammered out an agreement, which won a bankruptcy judge’s approval.

As part of the deal, Barnes & Noble was required to send a clear message to customers about the information exchange.

The bookseller typed up the message and gave Baxter a two-hour deadline to look it over. Its attorneys then ignored Baxter’s suggestions, agreeing only to use his proposed subject line, “Important Information Regarding Your Borders Account,” and insert one word into the email.

Baxter argued for his changes without much luck—as detailed in a 14-page email exchange he filed with the court as evidence of the dispute.

“We disagree with your position that you have approval rights over the specific wording of the opt out notice. We believe the notice complies with all applicable requirements of the sale order,” Barnes & Noble attorneys said, adding that they had been “very accommodating of all of your concerns throughout this process.”

Borders’s customers have until Oct. 15 to tell Barnes & Noble to leave their name and information off their transfer list.