Q&As

Buying or selling a database? What are the key data protection and intellectual property issues when purchasing an online members club? Is data protection consent from members required?

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Published on LexisPSL on 22/08/2014

The following Information Law Q&A provides comprehensive and up to date legal information covering:

  • Buying or selling a database? What are the key data protection and intellectual property issues when purchasing an online members club? Is data protection consent from members required?
  • Data protection and databases
  • Does consent need to be obtained?
  • Does notice need to be given and, if so, when?
  • Additional considerations
  • Transferring databases

Data protection and databases

If a buyer purchases an online e-commerce business as an asset purchase and part of that business is an online members club where members pay for an annual subscription, the essential nature of the transaction is likely to be that the seller is selling and the buyer is buying a database of the members’ details. Those details contain 'personal data' and so the Data Protection Act 1998 (DPA 1998) will apply to the processing of such data.

This scenario would seem to be analogous to the situation of buying/selling a customer database, and the Information Commissioner's Office (ICO) provides some specific guidance on this: see Buying and Selling Customer Databases.

Does consent need to be obtained?

As a first step, a buyer should check any notices given to, or consents originally obtained by, the seller of the database from individual members relating to the processing of their personal data to confirm how consents were obtained and the scope of the processing activities that are permitted so as to determine if the present scenario is covered. It may be that individuals were informed at the data collection stage that their personal data might be disclosed to third parties on a merger or acquisition and their consent already obtained to this.

The circumstances in which consent of data subjects must be obtained to processing under

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