To use a situation analogous to the situation with CarrierIQ, he did not have permission and you never even knew he was there or that the camera was there. However, the camera is digital, it is connected to your power outlet with a battery-backed UPS, and it has an active wireless modem attached to it.

Maybe he did send data, maybe he didn't. But he's also sent you a CnD notice and threatening to sue you if you tell anyone.

I am a bit lost at all the down votes but he was recording data that breaches privacy acts. If he did send such data without permission it is a rootkit and can be unlawful (data protection act, uk). Because everyone has collectively found out about this at the same time a CnD would not work.