Phorm, the controversial software company that has been rejected by the UK after much consumer concern, now appears to be doing well in Brazil.

The company was criticised for providing a service that interferes too much with privacy. Their software enables ISP providers to track consumer behaviour which then enables online advertising to be very targeted. Although large companies showed an initial interest, UK backing fell away when the controversy hit the mass media. Even Sir Tim Berners-Lee, one of the internet’s founders, attacked the business for intruding on privacy too much.

Phorm has managed to gain a strong foothold in Brazil with many companies signing up to their service. There is also speculation that they are in talks with the news and entertainment website Terra which is owned by Spain’s Telefonica which does business across South America and the US.

Consumers fear that Phorm may try to enter the UK again via the back door: Telefonica owns the O2 telecoms business. This is highly unlikely. Even if Phorm were to be exonerated in the UK, PR and marketing departments are unlikely to engage with a company that has been so publicly ousted from the UK marketplace.

Tracking online consumer behaviour is a lucrative and effective way to gather data that allows internet marketers to target audiences with products that are honed to their tastes and needs. What consumers are not aware of is that this is happening all the time when they are online. Amazon, for example uses software that suggests products for you based on your previous choices. Google adapts its response to your search queries depending on your previous online behaviour. Facebook advertises to you based on the analysis of what you do and write on their site.

Last August the Office of Fair Trading said they would be investigating online advertising including software that tracks consumer behaviour. It remains to be seen whether the results of this study will have an impact on how UK marketing can go about their business.

The controversial behavioural marketing company Phorm has been under constant criticism for several months. The latest reports suggest that they may be pulling out from the UK altogether.

A spokesperson from Phorm said:

‘Phorm remains fully committed to its operations in the UK.

‘We continue to be active in the market and are confident of the opportunities domestically. Meanwhile, Phorm is also making substantial operational progress internationally.’

Speculation comes after two of the internet service providers that it intended to work with have pulled out. BT, who were involved in the controversial ’secret’ trials of Phorm on their networks have ‘no imediate plans’ to continue with Phorm. Talk Talk have pulled out and Virgin Media ‘continues to examine behavioural advertising technologies, including Phorm.’

Phorm claim that they: ‘…remain in ongoing discussions with a number of UK ISPs and remain optimistic about our longer term potential in this market.’ It is unknown who these providers are.

The companies latest figures show a loss of $15m in the six months preceding June. However after raising $24m to tide it over it is undertaking its latest trials with the largest internet provider in South Korea, KT. Despite is current failure in the UK it is involved in 15 other markets across the world.

Phorm has been lambasted from opponents of behavioural marketing who say that it is an invasion of privacy. In the United States a recent study from the University of Pensylvania said that most Americans (66%) were not happy with the idea of receiving targeted advertisements.

The European Commission has been monitoring the developments in behavioural marketing. Viviane Reding, commissioner for information, society and media said that they are receiving many complaints about targeted advertising. On Tuesday at a lunch debate in Brussels she said that the situation was being closely monitored:

‘European privacy rules are crystal clear: a person’s information can only be used with their prior consent. Transparency and choice are key words in this debate… I will not shy away from taking action where an EU country falls short of this duty.’