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ISP data deal with former 'spyware' boss triggers privacy fears

Don't worry, 'that was a long time ago'

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In a telephone interview today, Phorm said its technology is actually a privacy improvement on current advertising targeting datatbases run by Google and others, because data is only stored while it is needed to serve an ad and then discarded.

A spokesman rubbished the links to PeopleOnPage that have worried some Reg readers. "The previous company was involved in the adware space, but that was a long time ago," he said. "We're actually setting a whole new gold standard in online privacy." He said Privacy International had given the technology the thumbs-up.

Phorm obviously feels it has a PR battle to win. When the tie-ups with BT, Virgin Media and Carphone Warehouse were trumpeted earlier this month, the majority of reports were window-dressed with bumf about a sideline in security. Webwise, the branding consumers will see Phorm's ad system under, will have anti-phishing technology built in. The in-browser warnings may have a laudable goal, but are irrelevant to what the company's actual business is and what it could mean for the millions of people being sold into it by their ISP.

Indeed, all the members of this four-way agreement to change what an ISP is for are keen to play down people's natural privacy worries. As with PeopleOnPage, net users will be identified only by an anonymised number. Phorm has also contracted accounting firm Ernst and Young to audit its privacy policies (read the report here [pdf]). Auditors found the firm "provides reasonable assurance" that it conforms to privacy standards.

That reasonable assurance is good enough for BT. "The simple answer is 'yes'," a spokesman replied when asked today if it is aware of Phorm's provenance and is happy to sell data to it.

A statement continued: "BT has carried out extensive commercial, legal and technical due diligence on Phorm and Webwise, and is confident that customer confidentiality and security is wholly protected. Webwise doesn't collect any personal information, or keep IP address, website addresses, keywords or search terms - it simply analyses web pages visited by BT customers and matches them against pre-defined categories of interest to advertisers.

"Detailed customer research by BT has shown that once customers are aware of the benefits of Webwise, they are overwhelmingly in favour of the free security features and more relevant advertising during web browsing. All BT customers will be able to switch Webwise on or off as they see fit."

A spokesman for Virgin Media said: "We are aware of Phorm's background and are comfortable that we have conducted the due diligence."

Carphone Warehouse has not returned our call.

Some ISP customers remain unconvinced on the privacy questions. On the Digital Spy forums, "Bruce1" pointed out that sharing so-called anonymised data has caused big privacy problems before. "After all, remember that both AOL and Netflix have released similar anonymised data where identifying info was replaced with an assigned number... and it didn't take long for both sets of data to be de-anonymised" he wrote.

As well as being private, Phorm says its database will be a boon for consumers, ISPs, publishers, and advertisers. Net users will benefit from more relevant advertising, the firm reckons. How relevant ISP-level targeting will be in homes where the whole family uses the same connection is open to question, however. Nonetheless, Phorm's stock has surged on AIM this year.

All parties involved point out that having your data sent to Phorm will be optional. Phorm says an opt-out could work by accepting a cookie from its website, but that its trio of ISP partners will be consulting on whether to have an opt-in or an opt-out system.

It would be polite if BT, Virgin Media, and Carphone Warehouse consulted their customers as part of that process. ®

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