UK: Privacy Protection In Electronic Communications

With the release of a proposal by the European Parliament and the Council on 12 July 2000 to issue a directive concerning the processing of personal data and the protection of privacy in the electronic communications sector ('the draft Directive'), the Department of Trade and Industry ('DTI') has called for a consultation process to work out a UK response to the now on going negotiations on the draft Directive.

We at Kaltons certainly intend to participate in that consultation process and we would welcome any feedback from readers which would assist us in that process. First, however, we would like to outline the salient features of the draft Directive itself before turning to our contribution to the consultation process at a later date.

At the heart of the draft Directive is the intention to ensure that the content of electronic (as with all other types) of communications are not kept or stored and used by any person and that those who use electronic communications are not physically located through their use of such means, except with their consent or where emergency and national security reasons require otherwise. It also proposes to ban e-mail 'spam' throughout the EU.

The draft Directive - which is in fact intended to replace Directive 97/66/EC (the basis for the UK Data Protection Act 1998) and must be read together with it for the moment – requires member states to 'ensure the confidentiality of communications and the related traffic data by means of a public communications network and publicly available electronic communications services, through national legislation'. It is specifically targetted at the tapping and intercepting of such communications. It requires providers of publicly available communications services to provide for the security of their services and contemplates compensation for losses suffered if such security is not provided or where it fails.

The primary object of the draft Directive is to create rules which are "technology neutral": in that communications by electronic means should be treated the same as communications by any other means. Thus consumers should get the same high level of privacy protection immaterial of the mode in which their services are delivered.

The draft Directive is to apply to all 'electronic communications services and networks'. This is an update of the pre-existing definition under Directive 97/66/EC and is intended to cover all different types of transmission services for electronic communications immaterial of the technology used. To buttress further clarity of understanding, four more definitions are proposed:

• "calls" are defined as connections 'established by means of a publicly available telephone
• "communications" are defined as 'any information exchanged or transmitted between finite number of parties by means of publicly available electronic communications service'.
• "traffic date" is defined as 'any data processed in the course of or for the purpose of the transmission of a communication over an electronic network'
• "location data" is defined as 'any data processed in an electronic communications network indicating the geographic position of the terminal equipment of a user of a publicly available electronic communications service'

It is well known that it is possible to pinpoint by satellite the exact physical location of any person who uses a mobile phone. This can be done even when the mobile is not being used provided it is left on. The data which allows this is available to every mobile phone service provider to process. Such technology is implicit in the way electronic road location maps and telematic services providing road traffic information and guidance to drivers work. The good that can come out of such information is clearly manifest. For example, precise location data can allow emergency services to send quick assistance to users in trouble.

However, what of the need to ensure data protection and privacy protection? The question is whether such providers of services should be allowed to use such data at their own discretion without the consent of the user. Clearly the answer is in the negative and it has been so for quite a while now: this principle being embedded under Directive 97/66/EC already. The draft Directive strengthens this position by providing that such data may only be used with the consent of the subscribers. In this regard, it requires that subscribers be provided with a simple means of temporarily denying the processing of their location data. Obvious exceptions will be made in situations requiring emergency services, public and national security considerations and criminal investigations.

Traffic data refers to any data processed in the course of or for the purpose of the transmission of a communication over an electronic network. The draft Directive envisages correctly that such data will be and, indeed is being, used by service providers to provide value added services. While there is nothing sinister or wrong with this, it is clear that such data should only be used with the consent of the subscriber. Moreover, it is proposed under the draft Directive that subscribers should be fully informed about the type of data which is being processed and the purposes for which this is being done. Accordingly, a positive duty to inform the subscriber of the personal data which is being collected is proposed.

Under Directive 97/66/EC it was declared that the traditional default directories of subscribers for fixed voice telephony services was justified in view of the public interest. However, such has not been the case for mobile phone and e-mail subscribers who have preferred to remain anonymous. Hence, the draft Directive has proposed that subscribers of electronic communications services and networks be given the right to determine whether they wish to be listed in a public directory and the sort of data they prefer to have appended. It is also proposed that a duty be imposed on providers to inform subscribers of the purposes of use of personal data and obtain the consent of subscribers before use of such data.

This is likely to prove to be the most contentious of the various proposals under the draft Directive, at least in the UK. The draft article 13 proposes the granting of a right to all subscribers to refuse unsolicited communications for direct marketing purposes in respect of all forms of electronic communications (and not merely to voice telephony calls as under Directive 97/66/EC). This will include e-mail or other new forms of communications. E-mail for direct marketing purposes, in other words "spamming" will be prohibited and will be treated the same as spamming via faxes.

Apparently, four EU countries have already banned unsolicited commercial e-mail or spam. In other words, they have chosen the 'opt-in' system, i.e., subscribers request for commercial e-mails to be sent to them, but otherwise there is a prohibition against unsolicited commercial e-mail. However, the regime currently in operation in the UK (and most other EU countries) allows for the so-called 'opt-out' system: that is to say that it falls on the subscriber to indicate that he does not wish to receive any e-mail for direct marketing purposes and in that sense 'opts-out'. The problem that could arise in these circumstances, according to the explanatory notes to the draft Directive is that: 'Direct marketers in opt-in may not target e-mail addresses within their own country but they can still continue to send unsolicited commercial e-mail to countries with an opt-out system.' The draft Directive's proposed solution to this problem is the introduction of a harmonised opt-in approach.

Most of the proposals in the draft Directive are sound and attempt to catch up with the galloping strides of technological advancement. It is likely that most of them will be accepted in the UK and will be implemented by the second half of 2003. However, in respect of whether the UK should go along with the draft Directive's proposal of a universal 'opt-in' system in respect of unsolicited e-mail, there is likely to be divergent views. Our feeling at Kaltons is that the DTI will move towards the universal 'opt-in' system. Accordingly, our advice for the time being to those engaged in direct marketing is to look carefully at their websites to ensure that if (probably, when) the portentous universal 'opt-in' system arrives, websites and business strategies are modified accordingly. We have some ideas on how this might be done and are available to discuss it with those likely to be affected.

As this may well become law in the UK, companies may wish to consider taking a proactive stance by adopting such a policy early, thus maximising the size of their "legal" database well in advance.

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