Advertisement serving companyPhormhas defended its controversial technology at an
unprecedented "town hall meeting" in London on
Tuesday.
Phorm's technology is controversial because it tracks web
browsing behaviour to determine which advertisements to send to the
owner's browser. Critics say this is an invasion of their privacy,
and that use of the technology may break several laws.
Critics, led by Cambridge University's
Richard Clayton and
writer
Alexander
Hanff, charged Phorm with breaking several laws, including the
Regulation of Investigatory Powers Act (RIPA), the Fraud Act and
others, including European law on data privacy and protection.
Clayton, who has had an in-depth look at Phorm's processes,
praised the firm for the way it dealt with data protection issues.
However, he objected to Phorm's ability to deliver advertisements
to his browser. He said information about his surfing behaviour was
private data, and that Phorm's tracking infringed that privacy.
Several critics from the floor questioned the way in which
Phorm's customers - internet service providers BT Webwise, TalkTalk
and Virgin Media - would alert their customers to the fact that
Phorm would track their browsing habits and obtain their consent.
On balance, they wanted internet customers to be opted out by
default. TalkTalk is on record as taking this position.
Critics were concerned that Phorm planned to assume that website
owners gave their consent for Phorm to index keywords on their
pages. Phorm's senior vice-president for technology, Marc Burgress,
said Phorm checked webpages for code called robot.txt, which tells
search-engine spiders whether they are allowed to index the page.
If Google was allowed to, Phorm assumed it had tacit permission to
do so too, Burgess said.
Delegates questioned Phorm's history, alleging that the firm had
written spyware. They were also distressed that BT had tested
Phorm's technology in secret trials that involved tens of thousands
of customers without their knowledge or consent.
Phorm CEO
Kent Ertegrul gave a spirited defence. He showed how Phorm
destroys any link between a user's IP address and subsequent
surfing history. This plus aggregation of tracking histories to a
minimum of 5,000 made it impossible to identify an individual user,
he said. This was unique among search engines, he claimed.
He noted that other search engines, notably Google, collect and
store a user's IP address, all searches, their click-stream and
registration data. No critic at the meeting objected publically to
this.
Ertegrul noted that it was very hard for users to opt out of
other search engines' consent scheme. Phorm was suggesting ISPs ask
for an explicit consent agreement when users connect for the first
time, and run recurrent reminders in banner ads that users were
opted in and could opt out at any time.
He said Phorm retained no user data whereas other search engine
companies kept it for 13 to 24 months. Users could also delete the
Phorm opt-in cookie at any time, and this would break all links to
the browser's previous surfing history, he said. Ertegrul invited
anyone to go through Phorm's software at any time to check if it
was living up to its claims.
Moving on to the offensive, Ertegrul said Phorm offered a way to
preserve competition in many aspects of the internet. "It is all
about choice," he said.
All website owners, and even bloggers, had a chance to make
money from advertising, he said. This would preserve a diversity of
media voices that would be lost if internet advertising continued
to be dominated by Google, Microsoft and Yahoo, which only large
media groups would be able to afford.
It would also provide ISPs with a revenue stream at a time when
margins were shrinking. This would preserve a competitive market in
access to the internet, he said.
He said Phorm would ensure that users received advertising that
related to their interests, thus relieving them of unwanted ads and
junk e-mail. This would make surfing a better experience, he said.
It was comparable to being exposed to advertising by buying a
special interest magazine, he said.
He said Phorm had been at pains to ensure that its technology
and procedures were legal. It had already presented to the
Home Office, the
Information Commissioner's Office and
Ofcom, none of which had
raised objections. It was now canvassing European regulators to
ensure conformity with local restrictions.
A source close to Phorm confided after the meeting that they had
tried to raise MPs' interest in Phorm and internet privacy, and had
been rebuffed.
With respect to assertions that the public did not want its
privacy invaded by the likes of Phorm, Ertegrul said consumer
research and focus groups had shown consumers were neutral but
would like the option to cancel any consent agreement at any
time.
The US Federal Trade
Commission explored the issue of targetted advertsing based on
user's behaviour late last year in response to
Google's
acquisition of DoubleClick. It later issued
guidelines
for the self-regulation of the industry.
A
Datamonitor report published today reveals that television
broadcasters are likely to adopt targeted advertising for TV
programmes delivered via digital cable and over broadband links.
Datamonitor analyst Chris Khouri said consumers now have a much
wider choice of media. "This has led to a much more fragmented
marketplace, which makes it hard for advertisiers to reach their
audiences cost-effectively. This was why they are so interested in
behaviourally targetted advertising and ways to get their ads in
front of known receptive audiences."
The meeting was set up by 80/20 Thinking, the consulting arm of
privacy campaigner Privacy International. 80/20 Thinking is
advising Phorm on how to be more transparent in its dealings with
the public and is preparing a privacy impact assessment of Phorm's
technology.