Home Office accused of colluding with Phorm

E-mails between the Home Office and Phorm discuss the advertising firm's "informal guidance" to the public on whether the company's services are legal.

The Home Office has been accused of colluding with controversial online advertising company Phorm.

E-mails were allegedly sent between the two in which the Home Office discusses Phorm's "informal guidance" to the public on whether the company's services are legal.

Phorm's technology tracks users' activity and targets ads at them, based on which sites they've visited. Adverts relating to the user's history are then posted on any sites that have signed up to Phorm's service. So far BT has signed up, carrying out a number of trials - some of which were without users' consent.

A member of the public obtained the e-mails via a Freedom of Information request and sent them to the BBC.

They show the department asking if the firm would be "comforted" by its position.

The Home Office has said that the suggestion of collusion between it and Phorm was totally unfounded.

A spokeswoman said, "We have repeatedly said since these documents were released a year ago that the Government has not endorsed Phorm or its technology.

"We are committed to protecting the privacy of UK consumers and will ensure any new technology of this sort is applied in an appropriate and transparent manner, in full accordance with the law and with proper regulation from the appropriate authority."

The BBC reported that the exchanges between the two date back to August 2007. Phorm made a request for the Home Office's view on its technology, and the department asked for more information on it.

In later months the Home Office asks the firm what it thinks of the advice it is drawing up in relation to behavioural targeted advertising.

In an e-mail dated 22 January 2008, a Home Office official wrote to Phorm saying: "I should be grateful if you would review the attached document, and let me know what you think."

A 2007 e-mail from a Home Office official to Phorm said, "My personal view accords with yours, that even if it is "interception", which I am doubtful of, it is lawfully authorised under section 3 by virtue of the user's consent obtained in signing up to the ISPs terms and conditions."

In January 2008 the Home Office writes to Phorm to thank it for comments and changes to its draft paper. The official says, "If we agree this, and this becomes our position do you think your clients and their prospective partners will be comforted."

The chief executive of Phorm has also responded to the allegations in a letter to the Guardian. Kent Ertugrul denied there was any collusion between Phorm and the Home Office. He said the Home Office's advice was "an informed opinion on ISP-based targeted advertising, but in the United Kingdom it is for the courts to decide what is or is not legal, not the Home Office."

Phorm has defended its technology, saying it offers more privacy and protection than other systems and could be a valuable new source of funding for websites. It also says consumers would receive more relevant adverts.

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