Number 10 Dodges Phorm Investigation Calls

The Office of the UK Prime Minister Gordon Brown has rejected calls to conduct an investigation into controversial advertising monitoring software which privacy groups and the European Commission claim could infringe users rights.

Responding to an online petition this week, the Prime Minister’s office posted a statement which said that it was aware of the issues around Phorm but that the privacy debate around the technology was being handled by the Information Commissioners Office (ICO) and it did not want to interfere.

“ICO is an independent body, and it would not be appropriate for the Government to second guess its decisions,” the statement said. “However, ICO has been clear that it will be monitoring closely all progress on this issue, and in particular any future use of Phorm’s technology. They will ensure that any such future use is done in a lawful, appropriate and transparent manner, and that consumers’ rights are fully protected.”

For its part, the ICO has said that it has received some complaints from the public regarding Phorm but having conducted its own discussions with the company, it does not feel that users rights are being compromised at this time.

“We have had detailed discussions with Phorm. They assure us that their 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. Indeed, Phorm assert that their system has been designed specifically to allow the appropriate targeting of adverts whilst rigorously protecting the privacy of web users,” the ICO stated in a statement.

But while the UK appears to be taking a mild view of the possible impact on user privacy poised by Phorm, European authorities are not so sanguine. In April, the EC warned the UK government it will take legal action over its failure to protect users from the Phorm behavourial ad targeting software which has been used by BT.

Viviane Reding, the EU’s commissioner for information society and media, issued a video message in April which further spelt-out the EC’s views on any kind of privacy infringement.

“European privacy rules are crystal clear: a person’s information can only be used with their prior consent. We cannot give up this basic principle, and have all our exchanges monitored, surveyed and stored in exchange for a promise of ‘more relevant’ advertising!,” said Reding.

Phorm, produced by a London company, contravenes EU ePrivacy and personal data protection rules which cover the confidentiality of communications, says the EC, because it intercepts and monitors user actions – in some cases, without the user’s consent. Phorm was founded in 2002 as 121Media based in London, and took on the name Phorm In May, 2007.

BT has admitted that it tested Phorm without getting user consent, and UK consumers have taken their complaints to the EC, after the UK givernment did not respond to their satisfaction.

According to the EC, the UK has two months to reply to a letter of formal notice sent this week which marks the first stage of the infringement proceeding. If the UK fails to respond adequately and “fulfil its obligations under EU law”, the Commission warned that it will refer the case to the European Court of Justice.

The UK’s failure to clamp down on Phorm has been further exacerbated by reports that one of Phorm’s non-executive directors Kip Meek is also a government adviser on internet issues.