Connected Research

Union policy research in the 21st century

Phorm hit by second withdrawal

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Phorm, the controversial online advertising technology which tracks user movements across the web, has been hit for the second time this week by the withdrawal of another ISP from its incipient ‘Webwise’ service.

BT announced on Monday that it ‘had no immediate plans’ to deploy Webwise; and now Talk Talk, the second of three ISPs with which Phorm had an agreement to launch Webwise in the UK, has pulled out of its agreement. Virgin Media, the third ISP involved, has commented (registration required; limited viewing time) that it hasn’t ruled out deploying the technology but would communicate ‘openly and transparently’ with customers before taking any decision.

Together, the three ISPs are the largest in the UK, controlling about three-quarters of the market. Phorm was putting a brave face on the situation, saying that ‘the decision of BT, with which it has conducted three trials of Webwise, was not connected with issues of privacy but with the company’s changing priorities (BT said that it had ‘other stuff to focus on’, though private reasons may also have added to the weight of the decision) and that its agreement with Talk Talk had not, unlike BT, extended to any form of trial. Nevertheless, the loss of two of the three leading ISPs, and two of the three with which it had agreements, clearly hits Phorm’s activities in the UK very hard. It also said that it would concentrate on ‘faster moving overseas opportunities’ apparently particularly in South Korea.

Phorm works by tracking page downloads of ISP customers who have signed up to the service and, via keywords drawn from each page, matches those surfing patterns to an anonymous user profile. Users matching that profile then receive targeted internet advertising on web pages which matches their interests as identified by their surfing patterns. The service is controversial because Phorm has never successfully managed to deflect the criticism that it contravenes internet privacy by knowing where users go to on the web – which may evidently be sensitive. BT’s first trial of Webwise, under which online surfing data was passed to Phorm from a selection of BT customers without their knowledge, is the motive force behind a European Commission investigation of the efficacy of the UK’s online privacy laws, although subsequent trials were carried out with user consent. Other targeted advertising technology is being developed but this is based on advertisers developing commercial relationships with ‘partner’ websites rather than assessing users’ general surfing via their ISP.

Phorm has attracted a storm of online groups opposed to its activities and that of deep packet inspection more generally, including such central figures as Sir Tim Berners-Lee, recently appointed UK government adviser on opening up access to government data, among them.

The Commission wants UK internet privacy laws to reflect the EU approach based on obtaining ‘clear consent from the user that his or her private data is being used;’ currently, UK law only covers ‘intentional’ interceptions and requires there only to be ‘reasonable grounds for believing’ that consent to the interception of data has been given. [Edit Monday 13 July: As Chris Williams of The Register cogently concludes in his insightful piece on the affair, this likely future clarification of the legal position for any Phorm lookalike entering the fray is perhaps the really positive thing to come out of this whole business.]

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Written by Calvin

09/07/2009 at 3:13 pm

Posted in Communications policy

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