The e-mail and web browsing habits of British citizens are not adequately protected, says the European Commission.
From: news.bbc.co.uk
It said the government should have done more to guarantee online privacy when trials of a controversial ad-serving system were carried out in 2006.
"People's privacy and the integrity of their personal data in the digital world is not only an important matter, it is a fundamental right, protected by European law," said Viviane Reding, EU telecoms commissioner.
The Commission started the legal action following trials of the Phorm ad-serving system on BT's network in 2006 and 2007.
Although the UK government was happy with the way that the trial was run, critics said BT's customers who were unwittingly enrolled in it should have had the chance to opt out.