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2 October 2010updated 27 Sep 2015 2:12am

Paying for the government’s privacy pathos

Europe sues UK over online privacy concerns.

By Jason Stamper

News that the European Commission is suing the British government over its failure to tighten up privacy laws is hardly a big surprise – the EC has been trying to get the government to act since BT ran a covert web browsing analysis type-o-thing back in 2006.

BT trialled some technology from a US company called Phorm that monitors your browsing habits in order to offer you more targeted web adverts: so if you were to browse a few websites advertising cars, the next website you were to visit might also feature a car or car insurance ad. Or if you do a few searches for engagement rings and the next time your beloved sits down at the computer she’s bombarded with adverts for honeymoons: pure genius.

The major problem with the trial was that BT forgot to mention it to its broadband subscribers, raising a number of issues around privacy. It made a subsequent trial an “opt-in” rather than an “opt-out”, but the damage was done.

To be fair, BT insisted it was operating within the law, and when the issue was raised with the City of London Police they agreed. BT customers who complained to the Information Commissioner were also told that the department had no powers to investigate, while the Investigatory Powers Tribunal said – you guessed it – there was nothing it could do either, as it can only act when data has been intercepted by governments.

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The EC thought this all a bit off, frankly, and sent a series of stinging letters to the then Labour government saying it needed to comply with the EC’s Data Protection Directive and the ePrivacy Directive governing the confidentiality of electronic communications.

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It’s got no further with the Coalition government, so it’s taking it to court. The Home Office is now faced with a case referral to the European Court of Justice, which if successful, could mean fines running into the millions for failure to comply with the European laws (and we all know who will ultimately pay those fines – the taxpayer).

As for Phorm, the company has pretty much given up on selling its ad targeting technology in the UK and headed off to Brazil, after finding a Brazilian ISP prepared to use its technology. Phorm may not have a much easier ride there though – the Brazilian Ministry of Justice has so far given them a pretty cool reception.

A spokesperson for Phorm today told the NS that, “Phorm believes it would be inappropriate for it to comment [on the news] on the basis that it is no longer operating in the UK.” To be honest, it’s a wonder it’s still operating anywhere, having posted losses of $29.7m last year.

As for the Home Office, a spokesperson said that the government was, “Planning to make changes to address the Commission’s concerns and will be setting out more detail on any necessary amendments or legislation in due course”. Maybe best not to leave it too long this time, eh.

Jason Stamper is NS technology correspondent and editor of Computer Business Review.