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ICO Revises Phorm Statement - Calls For Opt-In Method

Posted: 10th Apr, 2008 By: MarkJ
The Information Commissioners Office (ICO) has revised its recent statement on Phorm (original news) to include calls for the system to be deployed on an OPT-IN basis only. Phorm, which works with ISPs to develop targeted advertising campaigns by monitoring the websites you visit, had previously been designed as an opt-out system only (ISP customers would be included by default).

The ICO's initial statement was widely criticised for appearing to be almost pro-Phorm, casting aside many of the concerns by reputable technical and legal experts, not to mention consumers. Though much of the original statement remains, its most important change is here:

Regulation 7 of [The Privacy and Electronic Communications Regulations 2003] PECR will require the ISP to get the consent of users to the use of their traffic data for any value added services. This strongly supports the view that Phorm products will have to operate on an opt in basis to use traffic data as part of the process of returning relevant targeted marketing to internet users.

Whether or not the Phorm products are a concern for the Commissioner will depend on the extent to which the assurances Phorm has provided so far are true. The Commissioner has no reason to doubt the information provided by Phorm but some technical experts have publicly expressed concerns. The Commissioner welcomes the efforts Phorm is making to engage with concerned technical experts and believes that it is only by allowing its technology to be subject to detailed scrutiny by independent technical experts that it will be able to prove their assertions regarding privacy which will be important for the commercial success of the product.

In the view of the Commissioner Phorm can operate Webwise and OIX in a way which is in compliance with the DPA and PECR but must be sensitive to the concerns of users. The Commissioner will keep the Phorm products under review as they are rolled out and his view will be strongly influenced by the experience of those users who choose to participate in any trials and the way in which they are able to make that decision. The Commissioner will also continue to be interested in the dialogue between technical experts and Phorm about the way in which the system operates.

The statement strongly suggests that BT and any other ISP's adopting Phorm will now need to make the system OPT-IN instead of OPT-OUT by default. TalkTalk (Carphone Warehouse) has already done that, although BT continues to insist upon an OPT-OUT method, while Virgin Media doesn’t appear able to make up its mind.

It is not year clear how BT will respond to this latest development, which could cast further legal concerns over its secret 2006 and 2007 Phorm trials.
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