Think-tank calls Phorm intrusive and illegal

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An advertising system developed by UK firm Phorm has been called illegal and "highly intrusive" by the Foundation for Information Policy Research (FIPR) in a letter to the Information Commissioner.

The company provides a service where internet users' browsing patterns are monitored in order to serve more accurate targeted advertising.

BT, Virgin Media and TalkTalk have all signed deals to sell their customers' data to the company, and both the Guardian and MySpace have agreements in place to provide targeted advertising on their websites.

However, FIPR believes that Phorm contravenes the Regulation of Investigatory Powers Act 2000 (RIPA) because it intercepts customers' web traffic.

"This activity involves the processing of personal data about internet users. That data may include sensitive personal data, because it will include the search terms entered by users into search engines, and these can easily reveal information about such matters as political opinions, sexual proclivities, religious views, and health," reads an open letter from the FIPR, addressed to the information commissioner, Richard Thomas.

"The Phorm system is highly intrusive - it's like the Post Office opening all my letters to see what I'm interested in, merely so that I can be sent a better class of junk mail," said Richard Clayton, treasurer of FIPR.

"Not surprisingly, when you look closely, this activity turns out to be illegal. We hope that the Information Commissioner will take careful note of our analysis when he expresses his opinion upon the scheme," he added.

The Information Commissioner's Office said earlier this month that it would be looking into how the advertising firm would protect privacy.

In the upcoming trial of the system by BT, customers will be informed that they are taking part in the scheme, and asked to opt in, which may provide a legal defence.

"We don't agree with FIPR's analysis. And its description of the Phorm system is inaccurate," said a Phorm spokesperson.

"Our technology complies with the Data Protection Act, RIPA and other applicable UK laws," the spokesperson added.

Earlier this week, it emerged that BT had conducted a secret trial of the system last year, angering some customers to the point that they have threatened legal action against the company.

Other groups have also come out against the advertising system, including the Open Rights Group, whilst sites such as BadPhorm have been created specifically to highlight the potential privacy issues surrounding the company.

Earlier this week, Sir Tim Berners Lee, considered the "father of the web", said the system could lead to unexpected consequences for web users, and that advertisers should be paying customers, not ISPs for access to such information.

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