GameStop had a tense week, with sales and losses declining. Today, the company announced a new partnership with crypto exchange FTX. Although the stock did get a little boost following the results of its quarterly earnings, it will have a legal challenge filed against the company in California.
Miguel Licea filed a class action lawsuit against GameStop in California's federal court, alleging that the company used the transcripts for personal information without users' consent.
According to a complaint, Gamestop secretly taps the chat feature on its website and shares the transcripts with a third party that harvests the data for marketing purposes.https://t.co/7BNdXWgc8l
Anyone who has attempted to obtain customer service from a company website will recognize the chat feature. Instead of using email or phone calls, users may use the chat feature to try to quickly resolve issues that they are experiencing.
The civil lawsuit filed in California alleges that GameStop created transcripts of those chat conversations without users' knowledge that they would, and would then transfer those transcripts to a third-party company, which would later utilize the information contained in those transcripts for marketing purposes.
The Invasion of Privacy Act prohibits recording or tapping private communication without the consent of all parties involved. Notably, GameStops' Contact Us section of its website was not disabled at the time of writing, displaying only a message that says Sorry, we are not online at the moment.
Before this lawsuit is even considered in court, and any theoretical court case begins, there's a long way to go. However, it's not a good news from a company that appears to be failing in many ways.