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Phorm system declared illegal in the UK. How absolutely phabulous!

Posted By TelecomTV One , 19 March 2008 | 11 Comments | (0)
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The Foundation for Information Policy Research, an influential UK think-tank, has sent an open letter to the Information Commissioner, Richard Thomas, stating that the online advertising system Phorm is illegal in Britain. Hoorah, yippee and drinkies all round!

Phorm's pervasive, insidious and extremely controversial snooping system provides so-called "targeted" advertising by spying on an Internet user's web-browsing activities.

It works by trawling silently through websites visited by individual consumers and then matches keywords from the content of any given page to a "profile". Users are then "targeted" (bombarded is a more aptly descriptive word) with advertising allegedly relating directly to their "interests" – interests that have been identified by a surveillance program running in the background on websites that have signed-up to use Phorm's snooping technology.

It is to be deployed by three of the UK's biggest ISPs. BT, Talk Talk and Virgin Media, while others said to be "evaluating" the system include Orange, Sky and Tiscali. However, they (and others) may well have to reconsider their proposed deployment of a system that users have to "opt-out" of.

The system is a nasty agglomeration of covert surveillance and corporate greed. It has absolutely nothing to do with respecting the customer's rights to privacy and the confidentiality of data.

It is the view of the Foundation for Information Policy Research that Phorm's system would leave the ISPs open to class action suits and charges of processing data illegally. Furthermore, under Europe's comprehensive data protection laws, the use of such a system requires the explicit permission of individual customers using an "opt-in".

Even more significantly, the Foundation for Information Policy Research says "the Phorm system will be "intercepting" traffic within the meaning of Section 1 of the Regulation of Investigatory Powers Act 2000. In order for this to be lawful then permission is needed from not only the person making the web request BUT ALSO from the operator of the web site involved (and if it is a web-mail system, the sender of the email as well)."

The open letter a says that "although in some cases this permission can be assumed, in many other cases, it is explicitly NOT given -- making the Phorm system illegal to operate in the UK."

In a press release, Nicholas Bohm, the General Counsel of the Foundation for Information Policy Research writes, "The need for both parties to consent to interception in order for it to be lawful is an extremely basic principle within the legislation, and it cannot be lightly ignored or treated as a technicality. Even when the police are investigating as serious a crime as kidnapping, for example, and need to listen in to conversations between a family and the criminals, they must first obtain an authorisation under the relevant Act of Parliament: the consent of the family is not by itself sufficient to make their monitoring lawful."

Richard Clayton, the organisation's Treasurer, adds, "The Phorm system is highly intrusive –  it's like the Post Office opening all my letters to see what I'm interested in, merely so that I can be sent a better class of junk mail. Not surprisingly, when you look closely, this activity turns out to be illegal. We hope that the Information Commissioner will take careful note of our analysis when he expresses his opinion upon the scheme."

Hear, hear!

The open letter also says, "The provision of this service depends on classifying Internet users to enable advertising to be targeted on their interests. Their interests are to be ascertained for this purpose by scanning and analysing the content of traffic between users and the websites they visit.

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This activity involves the processing of personal data about Internet users. That data may include sensitive personal data, because it will include the search terms entered by users into search engines, and these can easily reveal information about such matters as political opinions, sexual proclivities, religious views, and health."

For it's part, Phorm says that everything's alright really and people are kicking up a fuss for no real reason given that Internet users are "allocated pseudonyms" for some of the processing.

However, the fact is that at various stages in the processing of data, personal information relating to an identifiable private citizen can be linked directly to the "pseudonym" and the pseudonym can be linked to the IP address used, and the IP address can be linked to the user.

In other words some people will remain identifiable because of sites they choose to visit and the types of searches they make. The Phorm system also places unseen surveillance on email and users visits to chat rooms and social networking sites.

The Foundation for Information Policy Research open letter also says, "Users should have to opt-in to such a system, not merely be given an opportunity to opt-out. We believe this is also required under European data protection law; failure to establish a clear and transparent "opt-in" system is likely to render the entire process illegal and open to challenge in UK and European courts.

It continues, "It would be specially objectionable if opting out were to depend on the maintenance by the user of a cookie, since many reasonable users regularly clear all cookies; nor should users be expected to opt out by blocking one or more websites, since many may not understand how to do this or may make errors in trying to do so".

In response, Kent Ertugrul, the CEO of Phorm ,says he is "very, very comfortable" that his company is not in breach of data protection legislation and even goes so far as to tack on the sophistry that the system actually provides users with enhanced privacy because they are able to opt-out of the technology!! Utterly incredible.

Mr. Ertugrul insists, "We are willing for our opinion to be tested in law." With any luck he'll soon get the chance. And with a bit more luck we'll all be cheering when his system is declared illegal and ISPs have to stop using it.

Subscribers pay their ISPs for Internet access. Advertising on the Web is already pernicious and pervasive, but ISPs want to make more money from their customers and they are going to do it by snooping on user behaviour without that user's knowledge or consent. That is morally reprehensible and, as we shall find out in due course, probably illegal.

Now is the time to take a determined stance against this cynical surveillance. Do not take up a service contract with any organisation that will sell your personal information (whether is is "identifiable" or not) to an advertising company or any other third party without having given your express consent for it in writing.

Also take a look at your contract with your ISP and check that the devious so-and-so haven't just added a new clause to their terms and conditions (as some have), thus giving themselves the "right" to include you in to their obnoxious systems unless you very specifically opt out of it.

This grubby and sneaky little system, whose only purpose is enrich others by worming its silent, slimy and invisible way though your personal data, should be stamped-on and wiped out forthwith.

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11 comments (Add Yours) - click here to sign in

(1) 19 March 2008 13:03:12 by james link

Whats the big deal? Isnt targetted advertising better for us? I would welcome only seeing adverts of things that I might be interested in.


(2) 19 March 2008 13:41:00 by Tim Masson

I disagree, we'd care if it was some Government agency watching us and deciding which school we could send our kids too or which medical services we could get.


(3) 19 March 2008 15:44:36 by Phorm Comms Team

Hi - it is the Phorm Comms Team here - whilst we welcome the healthy debate on privacy and online advertisign, there is a number of isues in the above article that needs addressing.

Firstly there is nothing covert about Webwise at all. Users can opt in or out at any time. The first time users see the service, a large full screen menu will be presented with the chance to opt in or out.

Secondly, Webwise is not surveillance. We do not store any personal information at all. Nor does the technology store IP addresses or browsing histories. It simply observes anonymous behaviours and draws a conclusion about the advertising category that's most relevant. All the data leading to that conclusion is deleted by the time each web page is loaded. Furthermore, Phorm technology does not analyse SMTP mail or the content of webmail sites.

Lastly we don't agree with FIPR's analysis. And its description of the Phorm system is inaccurate. Our technology complies with the Data Protection Act, RIPA and other applicable UK laws. We've sought our own legal opinions as well as consulted widely with experts such as Ernst & Young, 80/20 Strategic Thinking, the Home Office, Ofcom and the Information Commissioner's Office (ICO). We discussed our system with the ICO prior to launching it and continue to be in dialogue with the organisation.


(4) 19 March 2008 16:24:48 by Harry Mooney

The mail from the Phorm Comms team to pick up on this item just proves how good at snooping they really are


(5) 19 March 2008 16:51:44 by The Walrus

Should we believe the opinion of the well respected experts at FIPR, or somebody at the firm that wants to get rich by ramming even more advertisements down our throats?

Ooh, that's a tough one. Not.

Intercepting my communications and the communications of people who use my website is illegal in Britain, and it a crying shame nobody at BT had the sense to think of this.


(6) 19 March 2008 19:41:10 by Andrew Luce

If BT insists on applying this would we be entitled to claim breach of contract and leave them for another ISP that did not do this without paying out their contract (PS is it true that BT have sneaked in a rolling 12 month contract clause?)


(7) 22 March 2008 09:32:07 by Toby jugg

If its so above board and open, then how come BT customers were not told that their data was being intercepted during BT's trial?

Also, how is it that BT explicitly denied that the logged interceptions, including business customers, were anything to do with them?

Not the actions of honest, open, trustworthy folk in my opinion. Neither is that the opinion of the folk in the BT forums.


(8) 22 March 2008 10:03:31 by Toby jugg

Your own documentation includes details of storing data for 'upto' 14 days (at the moment).
This clearly indicates that customers actual or extracted/interpreted data is NOT deleted at page load as you claim (unless you only mean you delete the passed data, not any data you have extracted/processed).

It also indicates further redirection of customers data (original or extracted)inherent in your system as it stands.


(9) 24 March 2008 21:37:23 by Toby jugg

>quote:
Because of inherent limitations in controls, error or fraud may occur and not be detected.
Furthermore, the projection of any conclusions, based on our findings, to future periods is subject to the risk that the validity of such conclusions may be altered because of changes made to the Service or controls, the failure to make needed changes to the Service or controls, or a deterioration in the degree of ffectiveness of the controls.
>end quote


(10) 26 March 2008 23:54:05 by phormwatch

>Hi - it is the Phorm Comms Team here - whilst we welcome the healthy debate on privacy and online advertisign, there is a number of isues in the above article that needs addressing.

First of all, you are not the Phorm 'Comms Team'. You are the Phorm PR team. In the
first instance, PR agents of Phorm went around publishing comments as the Phorm 'Tech Team'.
When the 'Tech Team' realised they were out of their depth with the technical questions,
they changed their title to 'Comms Team' and instead provided cookie-cutter responses to
posts which don't actually address the issues and are sometimes misleading.

>Firstly there is nothing covert about Webwise at all. Users can opt in or out at any time. The first time users see the service, a large full screen menu will be presented with the chance to opt in or out.

Nothing covert? The illegal trials which went on at BT with customer data was pretty covert.
BT denied ever engaging in such trials until they were found out. Now, AFAIK, BT are being
sued by customers for breaking the Data Protection Act.

Secondly, the 'opt-out' is entirely misleading. 'Opting out' merely means that users will no
longer recieve targetted ads. It does *not* mean that a users browsing data will never anywhere
near Phorm's servers - which are currently being held in house at BT in order to use a technicality
to get around Data Protection and RIP laws.

>Secondly, Webwise is not surveillance. We do not store any personal information at all. Nor does the technology store IP addresses or browsing histories. It simply observes anonymous behaviours and draws a conclusion about the advertising category thats most relevant. All the data leading to that conclusion is deleted by the time each web page is loaded.

Firstly, it is still interception of communications, whether you anoynmise it or now. For
that reason, not only is it morally wrong, but also illegal under UK law. Secondly, 'anoymising'
data is no guarantee that the data can in no way be tracked back to users -- the AOL debacle
where the company published so-called 'anonymous' data shows this very clearly.
Lastly, why should we trust Phorm and anything you have to say? Phorm formerly ran a spyware
company which infected people's computers with rootkits. There is no way people should
have any trust in the company.

>Furthermore, Phorm technology does not analyse SMTP mail or the content of webmail sites.

Nonsense. How will you know what websites are webmail sites? Only an intelligent human can
determine that. You can block some of the bigger names, but there is no way you can possibly
block every single webmail provider on the web.

>Lastly we dont agree with FIPRs analysis. And its description of the Phorm system is inaccurate. Our technology complies with the Data Protection Act, RIPA and other applicable UK laws.

Are you asking consumers to trust the opinion that the way a company operates respects people's
privacy on the basis of what the PR team of that company says? Even when privacy rights groups
say the contrary? Even when the people behind Phorm formerly engaged in writting spyware?

>Weve sought our own legal opinions as well as consulted widely with experts such as Ernst & Young, 80/20 Strategic Thinking, the Home Office, Ofcom and the Information Commissioners Office (ICO). We discussed our system with the ICO prior to launching it and continue to be in dialogue with the organisation.

You lied about Simon Davies didn't you? Simon Davies' comment regarding Phorm was not on
behalf of Privacy International. It was Simon Davies' own comment. Furthermore, he concluded:

"Will people please read our report to Phorm... In that report we argue that the system should be opt-in, that there are unresolved questions, that the matter of legal compliance is irrelevant to the issue of intrusion. For example, from page 10 of our PIA:"

As for Ernst & Young: Enron was audited by them right before the scandal and subsequent collapse
of the company. So next time you might want to leave Ernst & Young out of that list of yours.
The public is not impressed.


(11) 10 May 2008 11:03:10 by Toby jugg

VM have dropped ammendments into their T&C's which appear to be a blatent attempt to bypass customers privacy rights.

section G, part 2:
By having the services we provide installed in your home and/or by
using them you are giving us your consent to use your personal information together with other information for the purposes of
providing you with our services, service information and updates, administration, credit scoring, customer services, training, tracking use of our services (including processing call, usage, billing,
viewing and interactive data), profiling your usage and purchasing preferences for so long as you are a customer and for as long as is necessary for these specified purposes after you terminate your services. We may occasionally use third parties to process your personal information in the ways outlined above. These third parties
are permitted to use the data only in accordance with our instructions.

section G, part 7:
By having our services installed in your home and/or by using them you consent to our transferring your information to countries which do not provide the same level of data protection as the UK if necessary for providing the services. If we do make such a transfer, we will put a contract in place to ensure your information is protected.
You have a right to ask for a copy of your information (for which we charge a small fee) and to correct any inaccuracies.