Peter A Clarke

Bloomberg reports in Brazilian Web Provider Fined $1.6 Million For Selling Browsing Data to Advertisers that the Justice Ministry has fined a Brazilian telecommunications company for selling history of web usage of its customers to advertisers. It would be an egregious breach of APPs under the Privacy Act.  There are no reported enforceable undertakings entered into by the Privacy Commissioner or civil penalty proceedings under the new powers given to the Privacy Commissioner under the Privacy Act.

It provides:

In a first-of-its-kind enforcement action in Brazil, the Justice Ministry recently fined the country’s largest telecommunications company Oi $1.6 million for invading the privacy of subscribers to its broadband Internet service by without consent tracking their Web usage and selling the information to behavioral advertisers.

Amaury Oliva, director of the Justice Ministry’s Department of Consumer Defense and Protection (DPDC), told Bloomberg BNA July 28 that the department began to investigate Oi in 2010 based on allegations it had partnered with Phorm Inc.—a U.K.-based online advertising company—to develop a program to monitor Internet activity.

Phorm was at the heart of investigations by U.K. and European Union officials regarding the use of Phorm tracking software in trials involving the U.K. telecommunications company BT.

In the July 22 announcement of the fine, the DPDC said it confirmed that Oi was using a software program that mapped the Internet navigation profiles of subscribers. The tracking information was then sold to third parties interested in offering Internet advertising and personalized content to Web users, Oliva said.

Despite the fine, the telecommunications and software companies involved in the tracking plan denied any wrongdoing. Oi said in a July 23 statement that it would appeal the fine.

“The service was offered as a means of improving Internet navigation, but it was not made clear that it would be monitored and the navigation profile sold,” Oliva said. “This violates the principle of good faith, of transparency and the responsibility to inform. The company said that sensitive information was not stored, but who can guarantee that?,” he said.

He added that the fine wasn’t larger because Oi had suspended use of the Phorm software.

“Our process is administrative, but consumers who feel they were cheated can file suits before the courts and federal prosecutors can put together class action suits,” Oliva said.

In developing the Justice Ministry’s case against Oi, the DPDC consulted with Brazil’s telecommunications regulator, antitrust agency and Internet management committee, he said.

Oi released a statement July 23 in which it denied having invaded the privacy of any of its clients.

It said the software in question was discontinued in March 2013 and was only used with a small group of clients invited to test the product. According to Oi, the testing process was overseen by government regulators.

“The service was offered as a means of improving Internet navigation, but it was not made clear that it would be monitored and the navigation profile sold.”