California group sues Albertson's over privacy concerns

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September 10, 2004 (Computerworld) -- The Privacy Rights Clearinghouse (PRC), a San Diego-based privacy advocacy group, has filed a lawsuit against supermarket chain Albertson's Inc. and its pharmacy units, SavOn, Osco and Jewel-Osco.
The lawsuit, filed in California Superior Court in San Diego County, alleges that Albertson's violated the privacy rights of its pharmacy customers by illegally using their confidential information to conduct targeted marketing campaigns on behalf of large drug companies.
A spokeswoman for Boise, Idaho-based Albertson's called the allegations "false and totally without merit."
"We highly respect the privacy of our pharmacy customers and do not sell, nor have we ever sold, their private information," she said in an e-mailed statement. She said the company will "vigorously" defend itself against the allegations.
The lawsuit against Albertson's, announced yesterday, was originally filed in May. The announcement corresponds with the completion of service naming all the companies that participated with Albertson's in the marketing campaign, said Jeffrey Krinsk, a lawyer at San Diego-based Finkelstein & Krinsk, the law firm representing the PRC.
Among those named as "co-conspirators" and "abettors" in the case are more than a dozen of the country's largest drug companies.
The case is an "egregious example" of sensitive, personal information being used for profitable purposes by a company without the knowledge or consent of the individuals concerned, said Beth Givens, director of the PRC, at a news conference.
Albertson's was involved in a "deceptive practice that violates California law," she said.
At issue is Albertson's alleged practice of sending targeted marketing messages from drug companies to its pharmacy customers using confidential information gathered during the prescription-filling process.
According to the lawsuit, Albertson's extracts and stores the confidential information in a separate database. The information is used to launch targeted campaigns urging customers to "renew their prescriptions, switch to a successor drug manufactured by the same drug company or switch to an alternative medication," the suit alleges.
The marketing messages were disguised to appear as though they were originating from Albertson's, when in fact they were mostly written and approved by drug companies, the lawsuit says. Albertson's received from the drug companies up to $4.50 for every marketing letter and up to $15 per marketing phone call, according to the suit.
Albertson's' practice is in violation of California's Confidential Medical Information Act because the company didn't inform customers or get their permission to use the confidential information to deliver such marketing messages, Krinsk said. The lawsuit was filed to stop the practice, and it seeks restitution of any money the company may have made by using confidential information in this manner, Krinsk said.

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