Phorm – under scrutiny at the European level

By EDRi · April 8, 2009

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Deutsch: [ Überprüfung auf Europäischer Ebene| ]

On the event on 31 March 2009, the European Commissioner for consumers,
Meglena Kuneva, warned on the transparency in the online environment: “We
must establish the principles of transparency, clear language, opt-in or
opt-out options that are meaningful and easy to use. (…) I am talking
about the right to have a stable contract and the right to withdraw.”

The concern of the Commission is related to Deep Packet Inspection (DPI)
technology experiments such as the profiling and ad-serving system Phorm
secret tests performed in UK by BT in 2006 and 2007.

In a report issued in March 2009, Free Press advocacy group considers the
use of DPI technologies is a threat to the open nature of the Internet.
“Improper use of DPI (deep packet inspection) can change the Internet as we
know it–turning an open and innovative platform into just another form of
pay-for-play media. (…) When a network provider chooses to install DPI
equipment, that provider knowingly arms itself with the capacity to monitor
and monetize the Internet in ways that threaten to destroy Net Neutrality
and the essential open nature of the Internet” says the report.

The report concludes that although DPI can help in solving network
congestion problems the “technology–the same electronics equipment, in
fact–also allows providers to monitor and monetize every use of the
Internet, and DPI vendors succeed by developing and marketing this

EDRi-member Open Rights Group (ORG) has recently sent a letter to the major
websites such as Microsoft, Google, YouTube, Facebook, AOL, Bebo, Yahoo,
Amazon and eBay, urging them to opt out the controversial Phorm technology.
A petition initiated by the group, signed by about 21 000 people, is asking
for the investigation of Phorm and its banning if the system breaches
privacy laws.

A spokeswoman for Phorm said most of the companies having received the ORG
letter were already using the targeted advertising offered by the system and
that many of them have proven “their commitment to user privacy as
signatories to the IAB UK’s interest-based advertising good practice

While the UK peers consider that in relation to behavioural targeting, the
Information Commissioner’s Office, responsible for enforcing EU privacy
regulations, had failed in its duty to consumers (as in 2008, ICO accepted
Phorm provided it got permission from users if the data collected was used
for “value added services.”), the UK Government plans however to employ
similar technologies to track UK Internet users’ behaviour. Viviane Reding,
the European Commission’s telecoms commissioner who is currently
investigating Phorm believes an agreement with the UK government might be
possible on this matter.

In preparation of eventual regulatory measures, Kuneva’s department is
initiating an informal investigation of online privacy and data collection.

In the meantime, Phorm continues its tests. On 30 March 2009, Phorm
officially announced a trial of its technology by Korea Telecom.

EU issues ultimatum on internet privacy (31.03.2009)

Major Websites Are Urged To Reject Phorm Profiling (24.03.2009)

Report Warns Against DPI Technology (20.03.2009)

EU Extends Deep Packet Inspection Technology Investigation (30.03.2009)

Deep Packet Inspection – The end of the Internet as we know it? (03.2009)

EDRI-gram: UK Government ignores the European Commission regarding Phorm