Google’s attempt to buy Spirit Airlines’ data might come unstuck

Google LLC’s artificial intelligence researchers had been salivating at the prospect of getting their hands on a trove of business data acquired from the defunct airline Spirit Airlines Inc. in an auction, but the proposed deal is being challenged by two separate parties.

On Wednesday, the bankruptcy court that initially approved Google’s $10 million purchase of Spirit Airlines’ data agreed to halt the transaction temporarily after former flight attendants objected to the deal, saying it could violate their privacy. Then today, an AI training data startup called Micro1 Inc. came forward with a last-minute attempt to trump Google’s bid with a higher offer.

Google won the auction of Spirit’s digital archives last week. The records include decades of payroll, travel and recruiting files, along with about 100 million emails, 80,000 email accounts and millions of additional digital items. When Google’s winning bid was announced, it said it intends to use the information to improve its AI models, and promised that any personal customer data would be excluded from the purchase.

The court made sure of that. As part of the deal, Google was forced to agree to use a court-appointed ombudsman to oversee a “de-identification” process that would ensure the dataset was stripped of any personally identifiable information pertaining to Spirit’s customers, before it was given to Google. In addition, Google had to agree to never intentionally attempt to re-identify the data.

However, Spirit’s former flight attendants are worried, because the judge made no mention of protecting employee data. They’re worried that Google may be getting its hands on tons of personal information about the airline’s former workers, and a license to use it however it wishes.

That’s why the Association of Flight Attendants, which is a collective bargaining unit that represents Spirit’s former workers, went to court, arguing that Google relied on consumer protection laws to guarantee it wouldn’t expose any customer data. The problem is that these laws don’t cover workers, who are also entitled to confidentiality.

“The privacy architecture of this transaction is consumer-facing; its payload is disproportionately employee-facing,” the AFA argued. “Hence, the employee data is far more confidential than the customer data, yet receives far less protection.”

Judge Sean Lane, who is overseeing Spirit’s wider bankruptcy case, agreed to delay the sale until Sept. 9 to give the court more time to evaluate the AFA’s claims.

It’s this delay that has apparently prompted Micro1 Chief Executive Ali Ansari to try and outmaneuver Google at the last minute. Ansari told Business Insider that his company has just lodged a “materially higher” bid to acquire the data from under Google’s nose. According to that report, Micro1 sent its $12.5 million offer directly to Spirit Airlines’ legal team on Wednesday. Ansari justified the bid, saying that Spirit’s data is extremely valuable, and that Google’s bid was “actually quite low” considering that the airline had been in operation for decades.

Micro1 is no stranger to buying data from failed businesses, Ansari said. It usually pays up to $2 million to acquire their datasets, but the difference is that most are startups that went out of business after only a few years of operation.

Whether or not Micro1 will be successful in its bid isn’t clear. Nancy Rapoport, a law professor at the University of Nevada, told Business Insider that the court is likely to reject the offer. “A duly noticed, well-run auction generally won’t get undone,” she said. “The higher bidder had the opportunity to bid during the auction.”

But Lindsey Simon, an associate law professor at Emory University, said there’s a chance that Micro1 might get away with this, because such decisions are usually up to the judge’s discretion. “The bankruptcy code isn’t clear on this,” he said.

Photo: Wikipedia