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UK Government Deems Phorm Legal in EU Letter Response

Posted: 17th Sep, 2008 By: MarkJ
The UK Governments Department for Business Enterprise & Regulatory Reform (BERR) has finally responded to European Union (EU) concerns about its position towards the controversial Phorm advertising system (EU Phorm Letter).

Phorm, which works with ISPs to monitor what websites you visit for use in targeted advertising campaigns, has raised a multitude of privacy concerns among consumers. Many also feel that the UK has been complacent in failing to take these seriously.

Sadly BERR refuses to provide the full text of the letter it has sent in response to the EU's enquiries, though they have offered an official statement to The Register. The crux of it appears to be that Phorm is legal, provided it adheres to the following guidelines:

UK Government Letter to EU Regarding Phorm

The UK is committed to providing a high level of consumer protection. We take our community obligations very seriously especially in the area of data protection and e-privacy. The possible future use of Phorm technology has raised material concerns in this area and the UK authorities are working to ensure that if it is introduced into the market for internet based advertising services, this is done in a lawful, appropriate and transparent fashion.

After conducting its enquiries with Phorm the UK authorities consider that Phorm's products are capable of being operated in this fashion on the following basis:

  • The user profiling occurs with the knowledge and agreement of the customer.

  • The profile is based on a unique ID allocated at random which means that there is no need to know the identity of the individual users.

  • Phorm does not keep a record of the actual sites visited.

  • Search terms used by the user and the advertising categories exclude certain sensitive terms and have been widely drawn so as not to reveal the identity of the user.

  • Phorm does not have nor want information which would enable it to link a user ID and profile to a living individual.

  • Users will be presented with an unavoidable statement about the product and asked to exercise a choice about whether to be involved.

  • Users will be able to easily access information on how to change their mind at any point and are free to opt in or out of the scheme.
Future developments involving Phorm will be closely scrutinised and monitored by the enforcement authorities.

Conspicuous by its absence is any mention of BT's secret 2006/2007 Phorm trials, which many regard to have been illegal because customer consent was not given and never asked for. It is not known whether the full letter covers these points, although we suspect it probably does.

Meanwhile the City of London Police continues to consider whether or not to open a formal investigation into BT's hidden trials. In addition, delays related to the Phorm controversy and the desire for technical changes mean that BT's official trials of the technology continue to fall behind schedule.
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