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Congress accuses American Phorm of 'beating consumers'

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When US Congressman Ed Markey asked NebuAd CEO Bob Dykes whether his Phorm-like ad targeting system should require an opt-in, Dykes refused to answer.

"Do you support a policy where the consumer must say 'yes' before you roam through all their personal data and then turn it into an information product that is then sold to other companies?" asked the chairman of the House Subcommittee on Telecommunications and the Internet.

"Mr. Chairman," Dykes replied, "you're forcing me to answer one of those Have-you-stopped-beating-your-wife-recently questions."

"No," Markey said. "The question is 'Have you stopped beating the consumer?'"

Congressman Ed Markey

Ed Markey

This morning, Markey presided over a Subcommittee hearing that explored the privacy implications of NebuAd's system - a deep-packet-inspection setup that tracks the search and browsing activity of web surfers from inside American ISPs - and Dykes was on hand to defend his baby. Though most of the gathered Congresspeople agreed the system should require an opt-in, he insisted they were missing the point.

"I don't think opt-in or opt-out is nearly as important as robust notice to the consumer, so they truly understand what is going on, and then the opportunity to control that," he said.

To translate: He doesn't want an opt-in. That "robust notice" bit was Dykes' refrain throughout the more-than-two-hour hearing. Basically, he's saying that if NebuAd's ISP partners make a point of telling ISP users the system is turned on, an opt-in isn't necessary.

"Opt-in is rare. It's just for situations involving sensitive information, personal information that can harm or embarrass somebody. We've made a particular point of not having any personally identifiable information, not having any sensitive information."

According to Dykes, NebuAd uses a one-way hash to anonymize each user's IP address, and all that search and surfing data is merely used to place users in certain advertising categories. One category might include web surfers looking for luxury cars, Dykes once told us, and another might pool people researching French vacations.

But NebuAd is still tracking all your search and browsing activity. And it looks like this data is shuttled to its servers even if you opt-out.

Plus, the opt-out is cookie-based. And that "robust notice" bit is just talk.

NebuAd has already tracked users on multiple American ISPs, including WOW!, Knology, and Embarq, and notice wasn't always robust.

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