The EU has begun legal proceedings against the British Government, arguing that it has failed to properly implement European laws designed to protect internet users. What does this mean for e-commerce and online marketing?
The case has been sparked by the Government’s continued support for the secret testing of the Phorm user-tracking system on BT customers to generate targeted advertising, undertaken in 2006 and 2007.
But the ramifications of this legal action could be much further reaching than the slapped wrists the Government will get if it is found to have acted wrongly in backing Phorm when a complaint was made about the secret testing to Brussels.
The EU commissioner for information society and media Viviane Reding has been reported as saying that while behavioural-based advertising can be used by businesses on the internet, it must not do so at the expense of the privacy of internet users.
UK law makes it an offence to unlawfully intercept communications, but companies can wriggle out of this if they can argue either that the interception was unintentional, or if the company had reasonable grounds to believe it had been given consent to do so. In the case of Phorm, it has been argued that BT’s customers had given implied consent.
The outcome of this case could have ramifications on retailers, not just in terms of the advertising platforms and systems they choose when placing marketing on third-party sites, but also how far they go with tracking the activity of particular customers on their own and other sites, such as social networking sites.
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