Friday, June 20, 1997

AOL selling subscriber names, addresses to marketing firms

BY GEORGE AVALOS / Knight-Ridder Newspapers

America Online is making a subscribers list and checking it and then selling it.

AOL, the country's largest private online service, confirmed it is compiling names and addresses of its subscribers and then packaging the lists with demographic information. AOL said it sells the data to a list marketing broker that often sells lists to marketing companies or manufacturers.

"We rent names and addresses," said Tricia Primrose, a spokeswoman for AOL. "But if you are an AOL subscriber, and you don't want your name released as part of these subscriber lists, you can opt out."

To be sure, the practice isn't illegal. What's more, other companies in other industries have undertaken this sort of activity for some years now.

Still, this sort of activity by a company that has more than 8 million subscribers raises the issue of how freely should companies use and distribute information about their customers. Some privacy rights advocates question whether the list selling is ethical.

"Subscribers may go from being in the AOL chat room into the AOL fishbowl," said Mark Rotenberg, director of the Washington, D.C.-based Electronic Privacy Information Center.

Other observers believe AOL's list marketing violates subscriber rights.

"This is an invasion of privacy," said Evan Hendricks, editor of Privacy Times, an industry newsletter. "They don't provide sufficient notice to customers. They should be required to notify you up front. They shouldn't sell your information without your consent."

Word of the subscription practice jolted some AOL customers in the San Francisco Bay Area.

"I wasn't aware of that," said Walnut Creek, Calif. resident John Obal, who generally likes his AOL service. "I'm surprised they are selling customer lists."

AOL provides a way for subscribers to bar the use of their information. According to spokeswoman Primrose, people can go to the "My AOL" section of the online service. After diving down a few levels and going through a menu choice called "preferences," people can opt out of the list, Primrose said.

AOL also provides general information that alerts people to the fact that the company may market some of their information to other parties in the service's frequently-asked-questions, or FAQs, section.

The concerns over the list selling comes at a ticklish time for AOL. The company has been plagued by e-mail slowdowns and system outages in recent months. When AOL began offering unlimited access to its network for about $20 a month late last year, customers flocked to sign up, overwhelming the computer network's ability to handle e-mail and other activities. The company's difficulties have translated into red ink.

"The list is a money-maker for AOL when it's scrambling for revenue," said David Cassel, a Berkeley, Calif.-based AOL critic and freelance writer. "They are promising to return to profitability, and they are leaving no stone unturned in an attempt to deliver on that promise."