EC Drops Privacy Case Against UK Government

The European Commission (EC) has dropped its legal action against the UK Government, over the latter's decision not to prosecute behavioural ad technology firm Phorm for breach of EU data protection and privacy rules.

In 2008, phone giant BT admitted it had used business customers' data without permission, in a trial run for Phorm's 'Webwise' technology in 2006 and 2007. This technology analyses users' web surfing habits to determine their interests, and then delivers targeted ads to them. The trial resulted in a number of complaints from UK citizens and privacy groups to the Information Commissioner's Office and to the UK police.

On receipt of these complaints, the EC stepped in, and launched legal action against the UK Government, and in 2010, the Commission threatened to take the Government to the European Union Courts of Justice over the issue.

The UK Government has since amended its privacy legislation (through the Regulation of Investigatory Powers Act) to prohibit the interception of users' online communications without their explicit consent; and has established the 'Interception of Communications Commissioner' (ICC) to hear complaints about unlawful interception.

In a statement issued late yesterday, the EC said: 'The European Commission has closed an infringement case against the UK in recognition that UK national legislation has now been changed to properly implement EU rules on ePrivacy and data protection on the confidentiality of communications such as e-mail or Internet browsing. The Commission believes UK law and institutions are now well-equipped to enforce the privacy rights of UK users.'

Phorm - which is led by CEO Kent Ertugrul (pictured) - has spent the past few years finding alternative countries in which to launch its services, ploughing through mountains of cash in the process. Brazil and Romania have apparently seen promising results and operations there are due to be scaled up. Last October, Phorm arranged a £30m equity placing, to raise funds to repay earlier borrowing, and to enable it to expand into other regions, including China.

Web site: www.phorm.com .