Phorm Whips Up Privacy Storm

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Phorm Whips Up Privacy Storm

The new online technology used by Phorm has created quite a stir and has upset advocates of user privacy. All the negative publicity has the company up in arms and representative for Phorm (who has requested not to be named!) has replied to our original post. His feedback has been shared here.

This new technology ‘keeps track of’ the websites that users visit, if their ISP has signed up with this service.

Feedback: The representative says, “Phorm does not view or store the sites users visit. Phorm uses technology that has been built from the ground up to avoid any information that might identify a customer personally. Phorm’s system stands out from other online advertising systems in that it does not store your browsing history, IP address, or any personally identifiable information. The unique design of Phorm’s technology ensures that consumer privacy is protected and that, even under compulsion, no personally-identifying data or detailed browsing data can be retroactively provided to anyone.”

While it is a good thing that Phorm does not, at present, identify users individually, that does not change the fact that it tracks user activity, which many would consider to be spying.

But this is being done without the express consent of the users. BT admitted to using this technology without asking for its users’ consent initially. The BT trial, called Webwise, ended in 2008.

Feedback: According to them, “Phorm offers a clear consumer choice. Before any ISP launches Phorm’s service they will evaluate several different approaches to opt in and opt out and decide what best suits their customers. Whatever the format, users will be provided with clear details on what the service offers, and how it works, so that they can make an informed choice as to whether to participate. The most recent BT trial was conducted on a completely opt in basis.”

Tracking user interests helps the service provider to serve better targeted and more relevant ads to the customer in future, thus keeping the customer happy and helping the service provider to generate more revenue.

Phorm’s service is not very different from Google’s own ad and organic search results delivery service. Google can track a lot more sensitive information, including content not found directly through a Google search. However, Google is a much loved brand and hence gets away with a lot more “evil”.

According to the BBC, the UK Home Office has been accused of ‘colluding’ with Phorm.

A spate of messages have been exchanged between the Home Office and Phorm since August 2007, in which Phorm asked the Home Office if they have no objection to this technology, while the Home Office asked for more information about it, ostensibly to better understand public safety considerations and legal obligations. They have denied giving any advice to Phorm about possible criminal liability.

Baroness Sue Miller, Liberal Democrat Spokeswoman on Home Affairs however, says, the Home Office was interested in this technology to help with their agenda of counter terrorism.

Phorm’s Chief Executive, Kent Ertugrul however, says, the Home Office has only given an ‘informed opinion’ on the matter.

In the meantime, the BBC reports that the European Commission has started legal action against Britain, for allowing the use of this technology, following complaints about this service being used on BT, without user consent.

Feedback: Their spokesperson points out, “Phorm’s technology can be operated in a manner that is legally compliant with UK legislation and relevant EU directives. This has been confirmed by BERR and by the UK regulatory authorities. Consistent with UK and EU legislation, and in anticipation of any changes that may be made to the law in the future, our system offers unmissable notice and clear and persistent choice to consumers, a choice that is head and shoulders above current internet standards. The EU Commission announced infringement proceedings against the UK Government concerning the alleged failure of UK legislation to conform in certain respects with EU e-privacy and personal data protection rules. This is a matter for the Commission and the UK Government to discuss.”

The results of this matter, of course, remain to be seen.

British officials had said, last year, that Phorm conformed to European data laws. As can be seen in their feedback above, Phorm says its technology is “fully compliant with U.K. legislation and relevant E.U. directives.”

EU’s Telecom Commissioner, Viviane Reding however said, “Britain needs to change its laws to ensure proper sanctions to enforce E.U. confidentiality rules.”

If the UK does not voluntarily do so, Reding could take matters to the European Court of Justice, which would then have the final say in the matter.

Several individuals and organisations that advocate user privacy have approved of the European Commission taking an active interest in the matter.

To tell their side of the story, Phorm has created a website that attempts to rebuild its reputation, demistify the technology and clarify rumours that are currently being spread against the company.

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