FTC Flags Privacy Concerns With Proposed ConnectEDU Sale

The Federal Trade Commission weighed in concerning the proposed sale of ConnectEDU on Friday, raising questions about whether the company has the right to sell its assets which include private information about 20 million students, along with 5,000 educational institutions and 140,000 employers in 40 countries. Here's a copy of the letter from Jessica Rich, director of the Bureau of Consumer Projection.

ConnectEDU, based in Boston, was founded in 2002. TechCrunch reports that it has raised $28.7 million in financing, including support from the Bill & Melinda Gates Foundation, Allen & Co., and North Atlantic Capital.

In her letter, Director Rich points out that ConnectEDU hosts students have built personal lists of "their academic and personal interests, honors and awards, and work experience; employed resume builders, test preparation, and financial literacy tools; and engaged with networks of teachers, mentors, and potential employers."

In its privacy policy, ConnectEDU asserted that: “In the event of sale or intended sale of the Company, ConnectEDU will give users reasonable notice and an opportunity to remove personally identifiable data from the service."

Although ConnectEDU has moved briskly to sell its assets, it has not yet offered those millions of past users a chance to scrub their information from its site.

The FTC recommendation should a flag for any companies that collect student information and then sell the company: Read your own policies. If you promise to give users a chance to pull their data before you sell the company, that's what you'll have to do.

The next move? The judge presiding over the bankruptcy case in New York should weigh in with a recommendation.

Editor's note: EdSurge has received support from the Gates Foundation and a director of Allen & Co.