British government threatened over Phorm privacy row

April 14, 2009 |

British government threatened over Phorm privacy row

By John Lister

British government threatened over Phorm privacy row The European Commission is taking legal action to force the British government to clamp down on controversial ad technology used by the firm Phorm. The row involves how clearly users are made aware that their data can be intercepted for advertising purposes.

Phorm’s service, billed as Webwise, puts together a profile of the sites a user visits, then uses the data to pick more relevant adverts on websites signed up to the service.

However, unlike traditional behavioral advertising, the system works with the Internet service provider itself. It uses data from visits to all sites, not just those involved in a particular advertising system.

In Britain at least, it appears such data gathering has slipped through the safeguards which protect users whose behavior is monitored in this way, such as their right to know about the data collection, to give permission for its collection, and to exclude part or all of their data from collection.

BT, one of the leading Internet service providers in the UK, has already run tests of the Phorm system – without telling customers first. That led to a government investigation which concluded the activity was legal if the firms could argue they had “reasonable grounds for believing” they had permission to gather such data.

European officials now say British law does not fully comply with mandatory European rules on data protection and confidentiality. They have formally asked Britain to clarify its laws so that data can only be gathered where the user has clearly given consent.

If the British government refuses to do so,the case could go to the European Court of Justice, which has the power to force member states to change their domestic laws.

The row over Phorm recently prompted World Wide Web creator Tim Berners-Lee to warn British politicians that the technology had the potential to threaten the “integrity of the Internet as a communications medium.”