From Halopedia, the Halo wiki
The surveillance grid is a system used by the UEG and the CAA to keep track of civilians electronically. Bank accounts and personal identity are kept track of using the grid, removing the need for individual keys. While technically anyone can go offline, they would have a severe disadvantage because of the numerous features governed by the grid, features such as the privileges to purchase goods or drive private cars, all of which can only be done while connected to the grid. The surveillance grid on Earth is additionally capable of listening in on conversations, with cameras looking for specific cues such as facial expressions and body language and beginning to "listen in" when the video is flagged and the conversation isolated. This system was avoided by Petra Janecek following an outburst by Benjamin Giraud by beginning to talk about mundane subjects such as the water and a trip to the beach, noting that you can "Talk about whatever you want, but look like you're talking about the weather".
Off the grid
All of Earth's illegal immigrants are off the grid, and are essentially second-class citizens. They must either depend on charity or perform illegal work to make a living. Because they cannot keep electronic accounts, they use other forms of currency such as poker chips or a barter system to make business transactions. Certain businesses are aimed specifically at them, such as the Packbus.
In addition to those serving illegal purposes, some locations are kept off the grid as a means of assisting the government. Police Commissioner Kinsler of the New Mombasa Police Department owned a police car that blocked the grid. During the first day of the Battle of Earth, he attempted to use the lack of surveillance to rape Sadie Endesha, but the car's driver intervened.
This element of the future recalls the "Big Brother" concept of dystopian works like 1984 or Brave New World, both of which feature surveillance networks similar in concept and purpose to the one described above.