Phorm's Controversial Online Ad System Wins UK Approval

19 September 2008

LONDON: The UK government's Department for Business, Enterprise & Regulatory Reform has OK'd the use of an online system that tracks web users' online behaviour in order to pinpont them them with targeted ads.

A key regulatory proviso is that the system does not violate EU data protection rules.

Created by US digital technology company Phorm, the Webwise system collects information from ISPs on the sites their customers visit and, based on this data, targets them with appropriate ads.

Telecoms provider BT recently drew considerable criticism for using the system without informing consumers, and the government's ruling specifies that "user profiling occurs with the knowledge and agreement of the customer".

It also requires that "Phorm does not keep a record of actual sites visited", and that users must easily be able to opt-out of the scheme. 

Says the company: "The UK government's position on our technology reflects our common commitment to transparency and superior standards of online privacy."

It also argues there is a "good economic argument” that its system helps fund better content and services.

BT is already said to be planning a new set of trials, while the office of Viviane Reding – the EU's Information Commissioner who previously questioned the legality of the system – is said to be preparing a legal assessment in response.

Data sourced from; additional content by WARC staff