Phorm given up by UK ISPs

By EDRi · July 15, 2009

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Deutsch: [Britische ISPs geben Phorm auf |]

On 6 July 2009, just before the beginning of the investigation on Internet
privacy by UK MPs and peers of the All Party Parliamentary Communications
Group, the largest UK ISP British Telecom (BT) has announced it would not
roll out Phorm’s web monitoring and profiling system, Webwise, in its

Right after BT made this announcement, claiming that for the next three
years it needed to focus on network upgrades, other two large ISPs in
UK,Virgin Media and TalkTalk, declared they would not launch the system in
the near future either. The three ISPs signed an agreement with Phorm in
February 2008 but the system was fiercely criticized both by privacy
campaigners and regulators.

This decision comes after EU’s action to sue the UK government for failing
to properly implement European privacy laws as a result of the discovery of
the secret trials of Phorm performed by BT.

“We continue to believe the interest based advertising category offers major
benefits for consumers and publishers alike. However, given our public
commitment to developing next generation broadband and television services
in the UK, we have decided to weigh up the balance of resources devoted to
other opportunities. Given these resource commitments, we don’t have
immediate plans to deploy Webwise today. However, the interest based
advertising market is extremely dynamic and we intend to monitor Phorm’s
progress with other ISPs and with Webwise Discover” (a new Phorm sideline in
content technology) “before finalising our plans,” was BT public statement.

BT’s decision triggered similar decisions by the other two large ISPs who
would have not been able to stand by Phorm on their own. “We continue to
believe interest-based advertising has potentially important benefits for
consumers, internet service providers and website owners. However, given the
fast moving nature of the sector, Virgin Media intends to extend its review
of potential opportunities with suppliers, including Phorm, prior to making
any commitment to launch any of these technologies. We recognise some
consumers have significant concerns about the potential implications of
interest-based advertising for their privacy. Virgin Media is committed to
ensuring that any future deployment complies not only with the relevant
legal requirements but – as an absolute minimum – the best practice
guidelines contained in the Internet Advertising Bureau’s recently published
code of practice,” stated Virgin Media.

During the all-party parliamentary group on communications on 6 July, Peter
John, who runs the Dephormation campaigning website, told MPs that Phorm’s
technology was “mass industrial espionage – the only beneficiaries from this
system are the media companies”.

Sarah Simon, Phorm’s financial, strategic and policy development officer,
stated to the meeting that the company’s technology not only was in
agreement with the UK’s data protection laws but actually exceeded them. The
system would give consumers a clear opt out choice which many other online
advertising platforms do not.

The UK EDRi-member Open Rights Group welcomed BT’s decision as a “victory
for privacy” and commented: “Phorm will remain a threat to our fundamental
rights while they offer services that intercept communications without the
consent of all parties.”

Although the Phorm shares have dropped severly after the BT announcement,
the company declared the indefinite delay of the launch of its service in
the UK was not a such a serious blow as discussions are in progress with
other potential partners in 15 other countries and, for instance, it has
already made a deal with South Korea’s largest ISP.

BT abandons Phorm (6.07.2009)

BT’s decision to ditch Phorm is a victory for privacy (6.07.2009)

Phorm dealt major blow as TalkTalk drops Webwise (7.07.2009)

EDRI-gram: Infringement procedure against UK for lack of privacy protection