Government Communications Headquarters (GCHQ), described as the UK's listening post as the agency responsible for signals intelligence, was found in breach of the law by a secretive UK tribunal created to keep Britain's intelligence agencies in check.
The Investigatory Powers Tribunal (IPT) said that GCHQ's access to information intercepted by the US' National Security Agency (NSA) breached human rights laws.
The court found that the collection contravened Article 8 of the European Convention on Human Rights, which protects the right to a private and family life.
The breaches could open up the possibility of anyone asking for the information that GCHQ holds on them to be deleted.
Some of the privacy groups that brought the complaint are beginning proceedings to do so.
It is the first time the tribunal has ruled against an intelligence agency in its 15-year history.
The IPT said there was a lack of transparency.
The concerned practises disclosed as part of documents revealed by former CIA operative Edward Snowden, and related to information found through the NSA's PRISM and UPSTREAM surveillance programmes.
UPSTREAM allowed the NSA to intercept data through the fibre optic cables that power the internet.
The ruling today comes after a legal challenge brought by civil liberties groups Privacy International, Bytes for All, Amnesty International and Liberty.
Some of those groups will now seek to find whether their information was collected through the programmes and ask for that information to be deleted.
"For far too long, intelligence agencies like GCHQ and NSA have acted like they are above the law," said Eric King, deputy director of Privacy International.
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