IT strategy - Interference in the online.

Microsoft’s continuing troubles with the US Justice Department, and now with the EU Commission, are just the tip of a very large iceberg.

Over the next few years we are likely to see politicians and government regulators getting much more involved with IT – and in ways that will affect users as much as vendors.

There are two main drivers of this involvement. The first is obvious – in the climate of greatly increased nervousness following 11 September, security has become an over-riding concern. Already we’ve seen calls from Home Secretary David Blunkett for new legislation to compel internet service providers, transport carriers and financial institutions to retain transaction records for longer, so they can make them available to the authorities if required. He’s also called for the introduction of a national identity card scheme. In the US, Larry Ellison, chief executive of Oracle, has called for ID cards carrying digitised thumbprints and linked in to existing government and private databases.

There will be some confusion as lawmakers in various jurisdictions struggle to make the new security crackdown work with laws born in a more gentle era. In the UK the timing is particularly unfortunate. The provisions of the existing Data Protection Act of 1998 only came into force on 24 October 2001. Some prudent measures you may wish to take – for example retaining staff emails and recording customer behaviour on web sites – may be open to legal challenge.

Nonetheless, it is management’s duty to comply with the law even when it is contradictory. It may be necessary to look again at your published privacy policies and at exactly how your internal mail and external customer-facing systems work. Take legal advice before making costly changes. Hopefully, privacy advocates and data protection authorities around the world will show flexibility in this difficult period.

The second reason we can expect more political interference in IT has nothing to do with recent dramatic events. Instead, it has everything to do with the way technology is evolving. The way we are now using IT is taking us deeper into areas that have always been of concern to the state and strong commercial, consumer or cultural vested interests that can mobilise political opposition to new things they don’t like.

The music industry’s successful criminalisation of Napster is a classic example. The online music-swapping service wasn’t tamed until music industry lobbyists got new laws passed to stop it. We may see a similar battle pitting the motion picture industry against DivX, a new video compression technology that is already being used for piracy and legitimate distribution.

Cash-strapped mobile phone operators, many of whom have paid a fortune for 3G licences, may mount a challenge to WiFi parasitic grids. These are wireless networks based on the IEEE 802.11b ‘WiFi’ (wireless fidelity) standard that allow appropriately-equipped portable computer users to access the internet and make voice-over-IP calls for free.

These examples all involve commercial groups appealing to the state to intervene in their business battles. But the state itself has a direct interest in many other activities where technology is playing an ever-greater role. For example, Passport, Microsoft’s single-sign-on scheme for web transactions and payment is, as the name suggests, all about the authentication of identity, a classic area of state involvement. The rapid rise of online gambling has tax implications, not to mention potentially dangerous personal consequences that may end up with state agencies having to pick up the pieces. And new services such as Paypal (www.paypal.com) enable anyone with an email address to move money around the world with unparalleled ease.

Technology is mixed up in countless other important areas – the restructuring of markets, profiling and surveillance, new forms of fraud, vandalism, and drug-peddling – not to mention globalisation. Indeed, there are few controversial areas where IT isn’t involved in some way. Often, it provides the infrastructure or opens up new options for human ingenuity. It is not surprising that governments are taking a closer interest.

The simple truth is that IT is implicated in a lot of sensitive issues, and the IT industry and users aren’t immune to pressure. If people are fearful, even for unrelated reasons, IT makes an easy scapegoat.