New York Sues Web Marketer

New York Atty. Gen. Eliot Spitzer on Thursday filed suit against online marketer Gratis Internet, accusing the company of selling personal consumer data from millions of customers despite a strict confidentiality pledge.

“This is believed to be the largest deliberate breach of a privacy policy ever discovered by U.S. law enforcement,” Spitzer’s office said.

Gratis operates FreePay.com and several related sites that offer free music discs, consumer electronics and retail gift cards to users who participate in advertiser-sponsored trials. The company could not be reached for comment on the suit.

Gratis pledged on its site to “never give out, sell or lend” the names and data of consumers on its website but since 2004 has sold access to lists of millions of customers to three e-mail marketers, Spitzer said in a statement.

In each deal, Gratis provided 1 million to 7 million confidential user records, the attorney general said.

Last year, Spitzer began an investigation of companies that compile and sell lists of consumer data to marketers.

This month, e-mail marketer Datran Media Corp. agreed to pay $1.1 million to settle with Spitzer over accusations that it misused personal data, but it admitted no wrongdoing.

Spitzer’s office said Datran had bought records from Gratis.