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The Foundation for Information Policy Research (FIPR) has slammed the Information Commissioner Office's (ICO) for glossing over doubts over the legality of Phorm's advertising targeting in its public statement on the controversial company.

The ICO released a long-awaited statement on Phorm (pdf) on Friday. It said: "[Phorm] 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."

Nicholas Bohm, FIPR's general counsel, said on Sunday: "[BT] appear to ignore the fact that they can only legalise their activity by getting express permission not just from their customers, but also from the web hosts whose pages they intercept, and from the third parties who communicate with their customers through web-based email, forums or social-networking sites.

"We sincerely hope that the Information Commissioner will reconsider what appears to be a green light for lawbreaking."

The ICO said it will monitor BT's imminent third trial of Phorm with 10,000 volunteers. Its statement makes no mention of the two trials in 2006 and 2007 that intercepted and profiled the web browsing of tens of thousands of BT customers without their consent.

Neither BT or Phorm have explained why they believe the fully deployed system will be legal, or why that the secret trials were legal, beyond that their lawyers say so.

Meanwhile a battle over the Wikipedia article on Phorm began on Friday, with suspicious forum posters at Badphorm charging interference by self-interested parties. Widespread criticisms of Phorm were censored in a revision to the entry and more "on message" PR-type statements were inserted.

Wikipedians quickly moved to revert the changes to the article. You can compare the different versions here. The apparently Phorm-friendly edits included removing BT's admission that it misled customers and the media over its second secret Phorm trial, conducted in summer 2007.

A quote from The Guardian's advertising manager Simon Kilby where he explained the paper's decision to withdraw from negotiations to join Phorm's advertising network on ethical grounds was also censored from a BT IP address. It read: "Our decision was in no small part down to the conversations we had internally about how this product sits with the values of our company."

The Phorm-friendly edits have been traced* to an IP address range assigned to BT, although this does not imply its direct involvement.

BT denied the Badphorm posters' allegations today. A spokesman said: "It's nothing to do with BT PR. We haven't been involved with amending any Wikipedia entry on Phorm."

"BT employs 100,000 people."

Separately, a technical analysis of Phorm's technology by Cambridge University security researcher Richard Clayton has been released. Based on a lengthy consultation at the company's London offices, it confirms the FIPR's view that the final deployment will be illegal, because no consent is obtained from webmasters to profile the pages they send to users.

Clayton wrote:

Overall, I learnt nothing about the Phorm system that caused me to change my view that the system performs illegal interception as defined by S1 of the Regulation of Investigatory Powers Act 2000.

Phorm argue, with some justification, that their system does not permit them to identify individuals and that they meet and exceed all necessary Data Protection regulations - producing a system that is superior to other advertising platforms that profile Internet users.

Mayhap, but this is to mix up data protection and privacy.

Phorm says that of course I can opt out - and I will - but just because nothing bad happens to me doesn't mean that the deploying the system is acceptable.

You can read Clayton's report and accompanying blog post here.

Meanwhile, a petition on the Downing Street website arguing that Phorm's technology is inherently invasive has now passed the 10,000 signature mark. ®

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