The Financial Conduct Authority's (FCA) decision to partner with Palantir Technologies, a US-based data analytics firm co-founded by Trump supporter Peter Thiel, raises serious concerns about the erosion of UK data sovereignty and the potential for the misuse of sensitive citizen information. This collaboration, aimed at using AI to detect financial crime, risks exposing vulnerable communities to increased surveillance and potential discrimination.

Palantir, with its history of providing technology to controversial entities like US Immigration and Customs Enforcement (ICE), which carries out Trump's immigration policies, and the Israeli military, has a track record of enabling human rights abuses. Allowing this company access to a vast trove of UK financial data, including case intelligence files, reports on suspected fraud, consumer complaints, and social media activity, poses a grave threat to privacy and civil liberties.

The US Cloud Act is a central point of contention. This law allows US authorities to compel US-based companies to hand over data stored on their servers, regardless of where the data is located. While the FCA claims the Cloud Act does not apply and it will remain the data controller, legal experts and privacy advocates argue that this distinction is insufficient protection. The Open Rights Group rightly points out that the Cloud Act grants US authorities broad access to data held by US-based businesses like Palantir, regardless of the FCA's asserted control.

Martin Wrigley, a Liberal Democrat MP, is right to question the FCA's assurances, particularly given Palantir's track record and the potential for political interference. The risk of the Trump administration, or a future similarly inclined administration, gaining access to sensitive UK data is a clear and present danger.

The FCA's move mirrors a troubling trend of public sector bodies turning to US tech giants for AI solutions, often at the expense of data privacy and security. Sadiq Khan's decision to block Palantir's involvement with the Metropolitan Police, citing procurement irregularities and concerns about the company's values, highlights the ethical and practical concerns associated with such partnerships.

Furthermore, the FCA's claim that Palantir is merely a 'data processor' ignores the reality that even processors can access and analyze data, potentially identifying patterns and insights that could be used for discriminatory purposes. The data held by the FCA includes sensitive information about individuals and businesses, and the potential for this data to be misused is deeply troubling.