Case Law
British Gas Trading v The Data
Protection Registrar
Data Protection Tribunal Unreported (24 March 1998)
Information and Communications Technology: Case Note - British Gas Trading v The Data Protection Registrar
Oct 1998
This case note first appeared on the Lancaster Buildings website
This was an appeal to the Data Protection Tribunal (“the Tribunal”) against an enforcement notice issued by the Data Protection Registrar (“the Registrar”) under s.10 of the Data Protection Act 1984. In her notice the Registrar stated that she was satisfied that the appellant, British Gas Trading Limited (“BGTL”), had contravened the first, second and third data protection principles and was contravening the first. She considered that BGTL had contravened and was contravening the first principle by
“unfairly and unlawfully processing personal
data relating to individual customers for the supply of gas:
(i) in order to make unlawful disclosures; and
(ii) in order to achieve an unlawful purpose; and
(iii) for purposes, which, because of the nature of the property or rights
constituted by such data and the nature of the relationship between the data
user and its customers under which the data were obtained, are unlawful, or
at the very least, unfair, without the free and informed consent of such
customers”
the second principle by holding
“personal data relating to individual customers for the supply of gas for the purpose of debt collecting and tracing”
and the third principle by using and disclosing personal data held for registered purposes for the purposes of debt collecting and trading, which purposes were allegedly unregistered and involved unlawful disclosures.
The
Issues
BGTL was a registered data user and the purposes for which it was registered
included marketing and selling including direct marketing to individuals and
trading in personal information covering the sale, hire or exchange of
personal information. The main issue of the appeal was the extent to which
the privatized successor to a statutory undertaker was entitled to process
names, addresses and other personal information relating to individual
customers that had been supplied to the statutory undertaking for the
purpose of obtaining a gas supply when that undertaking enjoyed a monopoly
of the supply of gas.
The
Facts
Under the Gas Act 1972 British Gas Corporation enjoyed a monopoly of the
supply of gas in the United Kingdom. The Gas Act 1986 transferred that
corporation’s assets, including customer data, to British Gas Plc (“British
Gas”) which was a state owned public limited company. Some of British
Gas’s shares were sold to the public. The Gas Act 1995 abolished British
Gas’s monopoly in the supply of gas and separated the supply from the
delivery of gas. British Gas Plc split into two successor companies, namely
BGTL, which became a supplier of gas, and Transco, which became a
deliverer. BGTL acquired British Gas’s customer base including a database
containing billing information on some 19 million gas customers in June
1986. The alleged breach of the first principle stemmed from BGTL’s
distribution of a leaflet headed “Your Data Protection Rights – the right to
choose the information you need” to its customers with their gas bills. The
leaflet advised customers that BGTL wished to write to them about its
current and future products and services together with those of other
“reputable organizations” and to pass on customer information to other
companies within its group. Customers who did not wish to receive such
information or consent to such disclosure could tear off a coupon and return
it to BGTL by freepost.
The
Contentions
The Registrar contended that BGTL could not lawfully use customer data
otherwise than in connection with the supply of domestic gas because such
use would have been ultra vires and a breach of
confidence. Alternatively, she submitted that it was unfair to process
customer data for promoting insurance, financial services, electricity and
other goods and services that would not have been obvious to a customer when
he contracted for the supply of gas without his specific and informed
consent. As for the alleged breaches of the second and third principles,
BGTL offered to exchange customer information with local housing authorities
in order to trace individuals who owed them money. BGTL admitted the breach
and quickly put an end to that practice but did not carry out an inquiry.
The
Judgment
After analysing the legislation for the supply of gas, and the memoranda and
articles of association of both British Gas and BGTL, the Tribunal concluded
it was not unlawful to distribute the leaflet. Both the British Gas
Corporation and British Gas would have been entitled to enclose materials
promoting unrelated goods and services with customers’ gas bills. A duty of
confidence did not arise from the supply of goods and services
simpliciter and it was irrelevant that British Gas had enjoyed a
statutory monopoly. On the other hand, the Tribunal found that BGTL had
acted unfairly in disclosing customers’ personal data to third parties and
promoting items as far removed from gas supply as banking and financial
services without specific and informed consent. No difficulty arose from
BGTL’s disclosure and use of customer data for promoting energy related
products and services because data subjects would have expected BGTL to use
such data for such promotions. They would not, however, have expected their
data to be disclosed or processed for promoting credit cards or other
financial services. BGTL’s leaflet did not alert customers to that
possibility so failure to fill in and return the coupon could not be
regarded as informed consent to such processing. Because BGTL had
processed personal data without the data subjects’ specific and informed
consent, the Registrar was entitled to serve an enforcement notice albeit in
different terms and on different grounds from the one that she had actually
issued.
In respect of its admitted breaches of the second and third principles, BGTL offered undertakings to the Registrar which the Tribunal found she was entitled to decline. The appeal was therefore dismissed with no order for costs.
The
Approved Enforcement Notice
On the 5 May 1998 the Tribunal approved a revised enforcement notice the
full text of which appears on the Registrar’s website. That notice stated
that BGTL had contravened and was contravening principle 1
“by unfairly processing personal data relating to individual customers for the supply of gas for purposes which, because of the nature of the arrangements for the supply of gas and the relationship between the data user and its customers and the statutory rights and duties applying thereto are, without the prior consent of such customers, such as to render the processing unfair.”
The order prohibited BGTL from processing such data otherwise than for promoting gas and energy-related products and services without customers’ informed consent and the exchange of personal data for debt collecting purposes.
