Phorm are a Delaware (US) company which have attracted a great deal of controversy and their service product has not even been launched yet. They will be providing online advertisers with the potential to target their customers with products and services based on the tracking of their online movements.

In theory the service is a perfect example of targeted behavioural marketing. It is market led: What are people looking for and how can we satisfy their needs. In practise its has sparked much controversy around issues of privacy.

The service works via internet service providers allowing tracking programming and data collection through their connection with their clients. In its early stages Phorm attracted the interest of Virgin Media and BT.

BT allowed Phorm to test their product on 30,000 of their customers between 2006 – 2006. These trials attracted many complaints about privacy although the UK government cleared Phorm of breaking any laws.

The European Union’s Commissioner for Information Society and Media, Viviane Reding, said that the Government has failed to protect internet users by failing to implement European laws. On the 14th of April the European Commission began an investigation.

‘Technologies such as internet behavioural advertising can be useful for businesses and consumers but they must be used in a way that complies with EU rules. These rules are there to protect the privacy of citizens and must be rigorously enforced by all member states.’

No UK laws have been broken as companies are allowed to intercept communications as long as there are reasonable grounds for believing that consent has been given. ISP’s will have an ‘opt-out’ option and this is considered to be enough. Privacy lobby groups however say that this is not enough and that an ‘opt-in’ option will protect individuals rights to privacy much better.

According to Phorm they have not broken any laws. In a statement they said: ‘There is a process in place to allow publishers to contact Phorm and opt out of the system, but we do not comment on individual cases.’

They also point out that, ‘Careful choices have been made to maximise privacy protection. In particular, Phorm has quite consciously avoided the storage of personally identifiable information.’

Webmaster Rights
Companies can opt out of their web-pages being included in any data that phorm uses and last week Amazon and Wikimedia foundation publically opted out:

In a blog the Wikimedia foundation said, ‘we consider the scanning and profiling of our visitors’ behaviour by a third-party to be an infringement on their privacy.

Jim Killock, executive director of the The Open Rights Group (ORG), which has been calling for companies to opt-out, said, ‘We would like to thank Wikipedia and Amazon for prioritising their users’ privacy and taking this stand. We hope Facebook, AOL, Bebo, MSN, Google and others can follow their lead.

‘By choosing to block the contentious online advertising system from scanning its web pages, these firms have taken the positive choice to protect their users’ privacy and their own brands.’

Tags: Behavioural Marketing

This entry was posted on Saturday, April 25th, 2009 at 2:21 pm and is filed under Behavioural Marketing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.