The UK government is facing criticism from MPs over its latest contract with Palantir, a US spy-tech company, which will gain access to sensitive financial regulation data from the Financial Conduct Authority (FCA). As reported by The Guardian, the contract has raised concerns about the potential risks of data exploitation and the company's links to Donald Trump.
The Liberal Democrats have called for a government investigation into the contract, which they say could be "a huge error of judgment". The Green party has also expressed concerns, with MP Siân Berry stating that companies like Palantir should have no place within UK government systems due to their involvement in President Trump's "illegal wars".
Palantir, founded by Trump-backing billionaire Peter Thiel, has built up over £500m in contracts with UK government agencies, including the NHS, police, and Ministry of Defence. The company will apply its AI systems to two years' worth of internal intelligence data from the FCA to help tackle financial crime.
Concerns Over Data Safeguards
Insiders at the FCA have questioned whether there are sufficient safeguards to prevent Palantir's "data lake" from being exploited in unintended ways. The company will have access to sensitive FCA investigations, including those involving high-profile figures such as Jes Staley and Crispin Odey.
The FCA has insisted that Palantir will be a "data processor", not a "data controller", and will only act on instruction from the regulator. The FCA will retain exclusive control over the encryption keys for the most sensitive files, and the data will be hosted and stored solely in the UK.
However, one insider told The Guardian that the information available so far lacks details on how the obvious risks would be controlled or limited. Daisy Cooper, the Liberal Democrats' Treasury spokesperson, has called for an investigation into the FCA's Palantir contract, citing concerns about the company's links to Trump and its potential impact on UK national and economic security.
Expert Analysis and Criticism
Martin Wrigley, a Liberal Democrat member of the Commons technology committee, has said that the FCA deal should be "stopped before it's started", arguing that it could create a "single behemoth" that UK firms won't be able to compete against. Donald Campbell, the director of advocacy at Foxglove, a tech fairness campaign, has called the contract "another worrying sign that Palantir is consolidating its hold over UK government services".
Palantir's European boss, Louis Mosley, has denied claims that the company may use customer data for its own purposes, stating that this is "something that we have no business interest in, and that we are legally and contractually prevented from doing".
The official announcement of the FCA contract states that Palantir will work across "all FCA datasets", which could include personal details and trading records of banks, hedge funds, and pension funds where they relate to cases of potential wrongdoing.
Government Response and Next Steps
The FCA has said that the data in the trial will not include trading records and that there is no risk of lock-in as it is just a trial. An FCA spokesperson stated that "criminals aren't slow to use technology to cause harm – we need to stay ahead of them. We can run a trial to help us do that while maintaining strict data controls".
HM Treasury has been approached for comment on the contract, which has raised concerns about the UK's reliance on US tech companies and the potential risks to national and economic security.
