Google's DeepMind AI arm—which was given access to the personal medical records of 1.6 million NHS patients on an "inappropriate legal basis"—has thrown the Royal Free NHS Foundation Trust into hot water, after the UK's Information Commissioner's Office confirmed on Monday that the hospital had breached data law.

The watchdog said that the London-based Royal Free had agreed to undertakings to improve its methods of sharing patient records. If it falls short of those requirements, the Trust could face a fine of up to £500,000 from the ICO.

In September 2015, the Royal Free inked a deal with Google's Deepmind "to develop and deploy a new clinical detection, diagnosis and prevention application and the associated technology platform for the Trust," the regulator said. It added:

In order to undertake clinical safety testing of this application and technology platform DeepMind, for this purpose and under the terms of the aforementioned agreement, processed approximately 1.6 million partial patient records containing sensitive identifiable personal information held by the Trust.

The Royal Free retained data controller responsibilities under its agreement with Google, which served as the data processor for DeepMind's Streams app. The service went live in February this year. It was initially tested on the identifiable patient records of 1.6 million sufferers of acute kidney damage. It apparently helps clinicians to quickly administer potentially life-saving treatment.

The ICO said it didn't want its findings to hamper the progress of that work, but added "concerns regarding the necessity and proportionality of the use of the sensitive data of 1.6 million patients remain despite the live deployment of the application." On this point, the regulator is yet to reach a conclusion.

However, the ICO found "that patients were not adequately informed that their records would be processed for the purpose of clinical safety testing." The watchdog said:

The commissioner [Elizabeth Denham] has concluded that the data controller [the Royal Free] did not provide an appropriate level of transparency to patients about the use of their personal data during the clinical safety testing phase and that this processing was not something that the patients might reasonably expect. Specifically the commissioner has concluded that the fair processing information available to the patients was insufficient. Patients were not, in the commissioner’s view, provided with sufficient notice that their records would be processed in support of the clinical safety testing of the Streams application. The commissioner notes the recent improvements that have been made by the data controller to improve transparency and that a revised notice regarding live clinical use is now available.

The ICO's undertakings, which the Royal Free must adhere to, include establishing a "proper legal basis under the Data Protection Act for the Google DeepMind project and for any future trials," and for the Trust to "comply with its duty of confidence to patients in any future trial involving personal data."

Google DeepMind admitted in a blog post that it had "underestimated the complexity of the NHS and of the rules around patient data, as well as the potential fears about a well-known tech company working in health." It added:

We were almost exclusively focused on building tools that nurses and doctors wanted, and thought of our work as technology for clinicians rather than something that needed to be accountable to and shaped by patients, the public and the NHS as a whole. We got that wrong, and we need to do better.

Google claimed it was "working hard" to improve transparency of its data processing methods within the NHS in light of the privacy blunder at the Royal Free.

"Our investigation found a number of shortcomings in the way patient records were shared for this trial. Patients would not have reasonably expected their information to have been used in this way, and the Trust could and should have been far more transparent with patients as to what was happening," said Denham.

"We’ve asked the Trust to commit to making changes that will address those shortcomings, and their co-operation is welcome. The Data Protection Act is not a barrier to innovation, but it does need to be considered wherever people’s data is being used."

Ars sought comment from the Royal Free. It simply pointed us at a statement on its website, in which it said it had accepted the ICO's findings. "We would like to reassure patients that their information has been in our control at all times and has never been used for anything other than delivering patient care or ensuring their safety," it added.