Targeted adverts: opinion Phorming?

7 March 2008

Privacy concerns about a new advertising service have prompted the government's information regulator to act.

Advertising company Phorm has signed deals with the UK's three biggest internet service providers (ISPs) to record the browsing habits of their users. Under the agreements, information gathered from the online behaviour of BT, Virgin Media and TalkTalk subscribers will be used to provide them with adverts that reflect their browsing behaviour.

While targeted adverts are not new, with ad networks such as DoubleClick having long used cookies to track users' behaviour across participating sites, existing systems rely on data 'volunteered' by the web user. By directly gathering usage data from ISPs, however, Phorm's open internet exchange (OIX) system makes more details of a user's web activity available to advertisers, and provides ISPs with an additional revenue stream.

Writing in Phorm's company blog, CEO Kent Ertugrul stressed that web users remained anonymous, and could opt out of the system at any time. He wrote that OIX had been built "to revolutionise the approach to privacy online", and added: "We can confidently say that we have produced the gold standard of privacy protection against which all online activity will be measured."

However, reports that BT silently trialled the system last summer have contributed to fears about the ISPs' openness. Some users and privacy campaigners are concerned that the system is 'opt-out' rather than 'opt-in', while the creator of a Downing Street petition has questioned whether it breaches existing privacy laws.

Responding to such fears, the Information Commissioner's Office (ICO) has contacted Phorm. In a statement it said: "At our request, Phorm has provided written information to us about the way in which the company intends to meet privacy standards. We are currently reviewing this information."

"We are also in contact with the ISPs who are working with Phorm and we are discussing this issue with them."

Category: e-commerce, Online marketing