• by Wendy Davis , Staff Writer @wendyndavis, October 4, 2011

A bankruptcy judge's decision to allow Barnes & Noble to purchase data about Borders' customers, including its database of 48 million email addresses and information associated with those accounts, isn't sitting well with everyone.

Sen. Richard Blumenthal (D-Conn.) slammed the court's ruling as "wholly inadequate and unacceptable" in a statement issued this week. "Profiting from personal, sometimes sensitive consumer information -- illustrated by this regrettable arrangement -- is spreading perniciously," he said. "This settlement points to a clear and urgent need for stronger and stringent protections for consumer privacy."

Blumenthal's comments were sparked by a decision of U.S. Bankruptcy Judge Martin Glenn in Manhattan allowing Barnes & Noble to purchase the information about customers enrolled in Borders' loyalty program. Borders had originally promised many of those customers that it wouldn't disclose personal information without permission. The company changed its policy in May of 2008, but collected millions of email addresses and other data before then.

Glenn ordered Borders to contact customers give them the chance to opt out of having their data sold to Barnes & Noble, which had won an auction to purchase Borders' assets for $13.9 million. That differs significantly from the initial recommendation of a privacy ombudsman, who suggested that Borders obtain opt-in consent before selling data of consumers to Barnes & Noble.

Barnes & Noble objected, arguing that this approach wasn't realistic. "Requiring Borders to obtain an opt-in consent ... effectively means the information would not be transferred to Barnes & Noble (as it is completely unrealistic to expect customers to affirmatively respond to a request from Borders, a company that has gone out of business)," Barnes & Noble said in court papers.