Phorm controversy continues after BT report leaked

Controversial advert targeting system Phorm drew more fire this week after an internal report on BT’s covert trials of the platform was leaked.

A document revealing a 2006 trial of the system by the UK carrier appeared on the WikiLeaks web site earlier this week.

Phorm is a behavioural advertising system, which monitors web activity and analyses user habits to better target ads, purporting to anonymise the data it collects so as to avoid privacy issues.

However, a backlash from industry experts and consumers has forced the service providers rolling out Phorm to make the system opt out rather than mandatory. So far the company has stuck trial agreements with UK service providers Virgin Media and Talk Talk as well as BT.

The leaked report shows that BT’s trial committed over 18 million allegedly illegal acts of interception and modification, after a tracking cookie was covertly dropped onto 7,000 BT customers’ computers.

During the trial, default adverts on web pages were replaced with more targeted ads, although the report concedes that it could not test the proposed opt-out system, “since [BT] conducted this test as a stealth trial”.

Richard Clayton, of the University of Cambridge’s computer laboratory, is one of the foremost opponents to the system and maintains that BT’s activities are illegal and the carrier should be prosecuted.

In April, UK privacy watchdog, the Information Commissioner’s Office, caused uproar among privacy advocates when it released a report which acknowledged that the use of Phorm had “provoked considerable public concern,” but said it was happy that the, “system does not allow the retention of individual profiles of sites visited and adverts presented, and that they hold no personally identifiable information on web users.”

With BT intending to push ahead with further trials of the technology this year and other carriers likely to do the same, the debate over Phorm’s legality is sure to continue, as experts peddle divided opinions.

Struan Robertson, editor of the Out-Law.com blog, owned by law firm Pinsent Masons, recently commented that Clayton’s argument is that while Phorm addresses data protection concerns, it ignores privacy. Robertson argued that if there’s informed consent, which is what Phorm is promising there will be, “that’s perfectly legal. Whether you like the idea or not is a different thing.”