UK: The TEch Lawyer - April 2011

Last Updated: 23 August 2011
Article by Kim Walker

The Government's ICT Strategy

Last month, the Coalition Government announced changes to central Government ICT strategy which it is hoped will pave the way for the delivery of efficient, cost effective public services. Significant challenges have been identified including the insufficient integration of infrastructure, over capacity, especially in data centres and long and costly procurement timescales.

The strategy will require some new thinking. Of particular interest:

  • Creation of a cross-public sector Applications Store;
  • Shared common infrastructure of the Government Cloud (G-Cloud) to play an increasing part in cutting costs and delivering services.

Both these initiatives will be a reflection of the trend in business, generally, to move to a more service-orientated delivery providing greater flexibility.

A strategic implementation plan to be produced in collaboration with departments and HM Treasury is due to be published by summer 2011.

Cookie, anyone?

The Issue

Online behavioural advertising. The EC Privacy and Electronic Communications Directive (the "Directive") is due to become UK law by 25 May 2011. Draft regulations are expected any time now, (referred to as the "e-Privacy Regulations" in this bulletin). If the Directive is reflected in the e-Privacy Regulations as is, you will no longer be able to place cookies automatically on a user's computer (assuming they have not opted out, of course). You will need the prior consent of customers to be able to set cookies, having provided them with clear and comprehensive information about the purposes of the processing in a user-friendly way. Cue pop-up consent windows every time a consumer comes to your site. Cue more pop-ups for consent to third party advertising cookies... An exception is cookies that are "strictly necessary" for the provision of a service "explicitly requested" by the user – so cookies can take a user from a product page to a checkout without the need for consent.

The Government is not keen on an opt-in system for cookies, fearing disrupted services for users and substantial losses for online providers - costs in programming pop-up windows or other means to obtain consent and lower advertising revenue and lost sales from users choosing not to allow cookies.

The Possible Solution?

A related EU directive, the Citizen's Rights Directive, suggests that, where technically possible and effective, one-off consent when a consumer sets up their web-browser is sufficient. Whilst this approach is favoured by the Government, they plan to implement the relevant provisions of the Directive, together, possibly, with clarification about the browser let-out and leave it to the Information Commissioner's Office to issue guidelines. The independent EU Advisory Body on Data Protection and Privacy does not deem the use of privacy policies in conjunction with browser settings sufficient to comply with the obligation on data controllers to obtain prior, informed consent, if the browser default is set to accept third party cookies without further user involvement.

So what?

It's a muddle. The Directive requires that Member States include effective, proportionate and dissuasive penalties (including criminal sanctions) for any breaches of the national provisions implementing the Directive. So far, we have some guidance in the form of an EU Framework for Online Behavioural Advertising from the Internet Advertising Bureau. We have yet to see what these penalties are for UK business.

Post 25 May 2011, do you risk failing to seek consent before the cookie is loaded, which could constitute a breach of the e-Privacy Regulations, enforced by the Information Commissioner, and could result in the commission of a criminal offence and individuals being entitled to compensation? Don't forget the reputational damage. Or, pre-26 May 2011, do you err on the side of caution, incurring costs and potential decline in revenue by creating pop-ups?

The contents of this article are intended as guidelines for clients and other readers. It is not a substitute for considered advice on specific issues. Consequently, we cannot accept any responsibility for this information or for any errors or omissions.

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