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Spitzer Alleges Firm Sold Personal Information From Millions of Customers

New York Attorney General Eliot Spitzer on Thursday sued a Washington, D.C., company for allegedly selling the personal information of millions of consumers. Prosecutors called it the largest deliberate breach of privacy in Internet history.

Gratis Internet Inc. and its owners Peter Martin and Robert Jewell were named in the suit filed in New York State Supreme Court. The defendants are accused of selling lists of millions of Gratis customers to three independent email marketers, despite explicit promises that no personal information would be given to anyone. The suit seeks a court injunction preventing the company from further sales, and seeks penalties under New York's consumer fraud statutes.

The suit stems from an investigation Spitzer launched last year of companies involved in the compilation and sale of marketing lists. Gratis collected customer information on several of its Web sites in exchange for free products, generally received through free trials of other products. The Gratis sites included FreeiPods.com, FreeCDs.com, FreeDVDs.com and FreeVideoGame.com.

From 2000 to 2004, Gratis posted on its Web sites several statements claiming to protect personal information, including one that said, "We well never give out, sell, or lend your name or information to anyone," Spitzer said.

Nevertheless, during 2004 and 2005, Martin and Jewell repeatedly violated those promises by selling customer lists to marketers, who then sent hundreds of millions of email solicitations on behalf of their own cutomers, Spitzer said. In each deal, Gratis shared between 1 million and 7 million confidential user records.

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