EU wants Google to change privacy policy - sources

European Union regulators want Google to make changes to its new privacy policy to protect the rights of its users, the EU's national data protection re g ulators said in a letter to the U.S. internet company, which was seen by Reuters.

The letter, which stopped short of declaring Google's approach to collecting user data illegal, follows a n investigation led by France's Commission Nationale de l'Informatique (CNIL) that began in February.

Leading the inquiry on behalf of Europe, France's data protection watchdog had already questioned the legality and fairness of Google's new privacy policy, introduced in March. This consolidated 60 privacy policies into one and pooled data collected on individual users across its services, including YouTube, Gmail and its social network Google+. Users cannot opt out.

The regulators' letter said "Combining personal data on such a large scale creates high risks to the privacy of users."

"Therefore, Google should modify its practices when combining data across services for these purposes," the letter said. It was signed by 24 of EU's 27 data regulators plus those of Croatia and Liechtenstein.

Google declined to comment.

In the past, the company has said the changes would allow it to tailor search results more accurately and improve services for consumers. Google has also said previously it is confident that its privacy policy does not run foul of European law.

In the letter, the regulators listed 12 "practical recommendations" for Google to bring its privacy policy into line. The first five cover how Google tells people about how their personal information and browsing records will be used, highlighting location data and credit card data in particular.

The regulators also want Google to spell out its intentions and methods for combining data collected from its various services. They want the web search giant to ask users for explicit consent when bundling data together, the letter said.

Online ads
The pooling of anonymous user data across Google services, is a big advantage when selling online ads.

Google and other large internet groups like Facebook provide free services to consumers and earn money from selling ads that they say are more closely targeted than traditional TV or radio campaigns.

Chris Watson, a lawyer at CMS Cameron McKenna LLP, said "Google is being very aggressive and are playing for high stakes because these (privacy policy) changes are very valuable to their advertising business."

"They may be prepared to test the legal position in Europe to see what they can get away with."

The tussle with the EU over data privacy comes at a delicate time for Google.

Europe's antitrust authorities are also examining the company's business model to see if it uses its clout in search advertising to favour its own services over competitors' offerings. Google is in talks with EU regulators on the case, and could offer concessions.

Copyright Thomson Reuters 2012