Phorm – under scrutiny at the European level

10 Apr Phorm – under scrutiny at the European level

8 April, 2009
On the event on 31 March 2009, the European Commissioner for consumers, Meglena Kuneva, warned on the transparency in the online environment: “We must establish the principles of transparency, clear language, opt-in or opt-out options that are meaningful and easy to use. (…) I am talking about the right to have a stable contract and the right to withdraw.”
The concern of the Commission is related to Deep Packet Inspection (DPI) technology experiments such as the profiling and ad-serving system Phorm secret tests performed in UK by BT in 2006 and 2007.
In a report issued in March 2009, Free Press advocacy group considers the use of DPI technologies is a threat to the open nature of the Internet. “Improper use of DPI (deep packet inspection) can change the Internet as we know it–turning an open and innovative platform into just another form of pay-for-play media. (…) When a network provider chooses to install DPI equipment, that provider knowingly arms itself with the capacity to monitor and monetize the Internet in ways that threaten to destroy Net Neutrality and the essential open nature of the Internet” says the report.
The report concludes that although DPI can help in solving network congestion problems the “technology–the same electronics equipment, in fact–also allows providers to monitor and monetize every use of the Internet, and DPI vendors succeed by developing and marketing this capability.”
EDRi-member Open Rights Group (ORG) has recently sent a letter to the major websites such as Microsoft, Google, YouTube, Facebook, AOL, Bebo, Yahoo, Amazon and eBay, urging them to opt out the controversial Phorm technology. A petition initiated by the group, signed by about 21 000 people, is asking for the investigation of Phorm and its banning if the system breaches privacy laws.
A spokeswoman for Phorm said most of the companies having received the ORG letter were already using the targeted advertising offered by the system and that many of them have proven “their commitment to user privacy as signatories to the IAB UK’s interest-based advertising good practice principles”.
While the UK peers consider that in relation to behavioural targeting, the Information Commissioner’s Office, responsible for enforcing EU privacy regulations, had failed in its duty to consumers (as in 2008, ICO accepted Phorm provided it got permission from users if the data collected was used for “value added services.”), the UK Government plans however to employ similar technologies to track UK Internet users’ behaviour. Viviane Reding, the European Commission’s telecoms commissioner who is currently investigating Phorm believes an agreement with the UK government might be possible on this matter.
In preparation of eventual regulatory measures, Kuneva’s department is initiating an informal investigation of online privacy and data collection.
In the meantime, Phorm continues its tests. On 30 March 2009, Phorm officially announced a trial of its technology by Korea Telecom.