The European Commission is suing the UK government over authorities' failure to take any action in response to BT's secret trials of Phorm's behavioural advertising technology.
The Commission alleges the UK is failing to meet its obligations under the Data Protection Directive and the ePrivacy Directive.
The action follows 18 months of letters back and forth between Whitehall and Brussels. The Commssion demanded changes to UK law that have not been made, so it has today referred the case to the European Court of Justice in Luxembourg.
Specifically, European officials firstly charge that contrary to the ePrivacy Directive there is no UK authority to regulate interception of communications by private companies.
BT customers who complained about the secret Phorm trials - revealed by The Register in 2008 - were told the Information Commissioner had no powers to investigate. The Investigatory Powers Tribunal meanwhile only has authority over interception by government bodies.
Secondly, the European Commission says the Regulation of Investigatory Powers Act (RIPA), which sanctions commercial interception when a company has "reasonable grounds for believing" consent has been given, does not offer strong enough protection to the public. The City of London police dropped their investigation of the Phorm trial, claiming BT had reasonable grounds to believe it had customers' consent.
European law says consent for interception must be "freely given, specific and informed indication of a person's wishes". BT did not obtain, or attempt to obtain, such consent to include customers' internet traffic in its testing.
Finally, the Commission says the provisions of RIPA that outlaw only "intentional" interception are also inadequate. "EU law requires Members States to prohibit and to ensure sanctions against any unlawful interception regardless of whether committed intentionally or not," it said.
If the government loses the case, it faces fines of millions of pounds per day until it brings UK law in line with European law.
A Home Office spokesperson said: "We can confirm that we are in discussions with the Commission about this directive, and are disappointed the Commission has decided to refer the case to the European Court of Justice.
"We are 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."
The full statement from the European Commission is here. ®