Web firm charged with selling confidential data

An American Internet company has been accused of selling millions of email addresses to marketing firms despite promising its customers confidentiality.

Web users registering to enter sites offering free iPods, DVDs and video games, were told that their email addresses would remain private, but the company that ran the sites, Gratis Internet, now faces charges that it sold the personal details to Datran Media, a web marketing company.

The case was brought by Eliot Spitzer, the New York Attorney General, who began an investigation into "data mining" last year. The practice involves gathering vast number of email addresses and selling them to bulk-mailing operations.

Mr Spitzer alleges that Gratis Internet sold as many as seven million addresses, making this case the largest deliberate breach of a privacy policy ever discovered by US law enforcement.

"Unless checked now, companies that collect and sell information on consumers will continue to find ways to erode the basic standards that protect privacy in the Internet age," Mr Spitzer said.

Gratis Internet denied the charges, which were heard by the state Supreme Court in New York.

"Allegations made by the New York State Office of the Attorney General that Gratis Internet ‘sold’ email addresses to Datran Media or other companies, and/or that these companies ‘purchased’ personal user information from Gratis Internet are completely untrue," the company said in a statement.

The statement went on to say that Gratis Internet hired Datran Media to manage "the logistics of marketing products and services via email to Gratis’ own user base."

A week ago, Datran Media was accused of using unauthorised personal data gathered by other firms from about six million email addresses nationwide. Datran agreed to reform its practices under a $1.1 million (£630,000) settlement.

A British expert in email security said that, if true, the charges could affect the way people use the Internet.

"Gratis's actions have struck right at the heart of the trust-based Internet model," Steve Gerrard, European marketing director of the email company Mirapoint, said. "We now face a situation where consumers – once willing to trade their email addresses for information of interest – will now think twice before they share any personal information online."

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