What You Should Know Before Selling Information
Information has become a commodity, and many people are making substantial sums of money buying and selling information. Some people selling information will have obtained it at no cost to them; others will have exerted substantial resources to collect the information. Before any transaction involving the sale of information, it is crucial that the type of information being sold and how it was obtained—along with all the other facts and circumstances—be analyzed to properly understand the legal ramifications.
Laws Governing the Sale of Information
Information is an intangible object. As such, selling information is not regulated by Article II of the Uniform Commercial Code. What statues do address the sale of information are the common law, and any applicable state or federal laws. This includes both criminal and civil laws. Below are several factors that may have legal implications in the sale of information.
Criminal Sale of Information
Can the sale of information be criminal? Yes, absolutely. There are several criminal laws implicated by the sale of information, including fraud and various privacy laws.
Fraudulent Sale of Information
Generally speaking, one commits fraud if she deliberately deceives someone in order to gain financially. This is implicated if one is selling information that she knows is false or inaccurate. California, for instance, in Penal Code § 484(a), makes it illegal to “defraud” another person of money.
Selling Information in Violation of Privacy Laws
Many people receive information from consumers in the regular course of their business. This information has value, and the business owner might like to be able to sell that information. However, consumers’ information is often protected by privacy laws.
Conspiracy, and Aiding and Abetting the Sale of Information
Generally, if you help plan a crime or aid in the commission of a crime, you are guilty of that crime. If you are part of a plan that involves selling information illegally, or if you knowingly help someone who is selling information illegally, you could be guilty of a crime.
Extortion and Its Relationship to Selling Information
Extortion, in lay terms, is getting benefit from someone by using force or fear. In California, Penal Code § 518 states, “Extortion is the obtaining of property from another, with his consent, or the obtaining of an official act of a public officer, induced by a wrongful use of force or fear, or under color of official right.” This is related to the sale of information because sometimes information is most valuable to someone if it is kept secret. If you threaten to release information unless someone pays you, you may be liable for extortion.
Civil Liability for Selling Information
Although the criminal liability for selling information may also include fines, civil laws are generally designed to financially compensate the person wronged for the damage you do to them. Many of the civil laws that are implicated in the sale of information mimic the criminal laws. Additionally, there can be several sources of liability. These include:
- Contract liability
- Breach of fiduciary duty
- Unfair business practices
- Intellectual property rights
This list is not complete, but as you can see there is a large range of implicated civil law.
There are several important considerations and legal issues that arise in the sale of information. Information is a commodity that has become much more actively bought and sold in the marketplace. Before engaging in transactions involving in the sale of information, it is essential to understand the legal ramifications.
If you are considering selling information, I encourage you to contact me to review the sale and help you understand the legal implications.