back to article Information Commissioner: Phorm must be opt-in only

The Information Commissioner's Office (ICO) has issued a major revision to its statement on Phorm, insisting that the ad tracking system must be deployed on an opt-in basis to comply with the law. Of the three ISPs connected to the scheme, only Carphone Warehouse has committed to opt in when the system is finally rolled out. …

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  1. Anonymous Coward
    Happy

    @Sam

    'What was the share high? I want to gloat at the difference, and you want to post it, admit it!'

    Guilty!

    You can keep track of Phorm's tanking shares here - it looks like the Matterhorn:

    http://www.iii.co.uk/investment/detail%3Fcode%3Dcotn:PHRM.L&it%3Dle

    It peaked £35.06 in mid-February, since then it's been downhill all the way with Phorm now trading at its lowest price in six months.

  2. Anonymous Coward
    Flame

    Still no mention...

    Of getting the consent of the PUBLISHERS of the material.

    I have NO problems with Google scraping my websites because it goes into their search engine and increases my traffic. I have no problems with sites with Google Ads on them because they've been placed there by the site owner.

    Google DON'T access the "private" parts of my website (Private messages etc.).

    Phorm however will be using MY material (and potentially confidential material - in that stuff in private messages might contain information which can identify an individual) to make money WITHOUT my permission using material that I've provided and I own. Or can I send you a bill every month based on the number of visits I've had from contaminated ISPs?

    Come on Phorm - answer that one. Consent has to be give by BOTH sides. I DO NOT give consent. So how do you stop your stinking scraping software from even looking at my sites? Going to give us a robot ID so we can put it into our robots.txt file - and I don't mean you piggy back on Google's robot, and I can't imagine Google being happy about that.

    As a website owner I expect you to formally publish information so I can put an entry into my robots.txt files which will block Phorm scraping AND ONLY phorm scraping.

    Of course Hell will freeze over, and Bill Gates will become a Linux fanboy before you do that because you don't actually give a shit about anyone else do you - as long as you can line your pockets with cash which you've earned by basically ripping off other peoples content.....

  3. Anonymous Coward
    Anonymous Coward

    Alex @ Phorm ...

    ... has been spotted. I expect he will be here soon.

  4. Laurent Leconte
    Gates Halo

    @Only half the issue has been addressed

    I just had a thought that made me giggle out loud.

    Imagine that Phorm and BT lie and spin their way around the opt-in issue (as many commenters have suggested).

    Imagine that the "service" Phorm offers comes back insidiously, and that a substantial proportion of computer-illiterate users are opted in.

    So far, that would mean the little guy got shafted by the big corp; par for the course and not that unlikely.

    Now, imagine that the other shoe drops; i.e. website owners objects to *their* content being intercepted. And, at the top of your head, which big web companies, interested in keeping their lucrative online advertisement business, would be likely to step into the arena ?

    That's right, I had a dream of a massive legal struggle between BT, phorm, Google, Yahoo, Microsoft (they're bound to have a go at the thing, on one side or the other) and a few others probably... A corporate version of Alien vs Predator, with Godzilla and the Gremlins thrown in as well !

    Man, I almost hope Phorm makes it that far, just so that I can grab the popcorn, kick back, and enjoy the show (almost, but not quite).

  5. vincent himpe
    Heart

    Yeah !

    Next step is to make it mandatory to put large banners ( kinda like the mandatory text on sigarettes ) Warning , by clicking below you consent to being profiled, your surfing habits catalogued, and as a result bombarded with ads for stuff you don't want/need.

    In very large print : NO thanks, and somewhere really at the bottom in very small print and hard to find 'yes i give up my privacy'

    That would really 'phlush' phorm down the drain.

    Love 'the Reg'

  6. Dangermouse

    @Alexander Hanff

    Can we not get the name and the advice of the "QC" whom Phorm employed under a Freedom of Information Act request from the ICO. Surely they would know who it was....

    I know that you cannot use the FIA against a private company, but the ICO must of seen this "advice" and made a judgement?

  7. Ian

    Material Change to Terms and Conditions

    ``I assume the next step for BT is to make the opt-in tick box a requirement in the contract to access the service (or maybe they will just put you a higher price if you don't opt-in). BT is just beyond shame.''

    They could try either of those things. They'd be hard-pushed to argue it's not a material change to the terms and conditions, though, which means that their hard-won long-term contracts for their customers are worthless. It's like cats in front of fires: hold their tail and they want to go somewhere else, irrespective of how happy they are where they are.

  8. hi_robb
    Pirate

    I think people are missing the point RE cookies

    Guys / Girls,

    While the news on el reg today is great, I think a fair few people are still missing the point with the opt in / out cookies.

    If ISP / Phorm uses cookies for Opt in or out, this will still mean that your data is going to be intercepted and passed to their servers. It doesn't matter if they proceess that data or not depending on the cookie, the simple fact is THEY WOULD STILL BE INTERCEPTING YOUR DATA.

    Everyones posing hypothetical questions about cookies being deleted etc And while they are all fair questions, they are directing the gaze of everyone away from the real issue. "Cookie or no bloody cookie, I (as I'm sure you lot don't), do not want my data just not processed, I do not want it intercepted in and way shape or 'Phorm'."

    In some ways Phorm must be sitting there laughing. As things stand, it looks like a lot of people will be happy for Phorm to be installed at their ISP, and for their data to be intercepted, as long as Phorm can say "Yes your opt out cookie means we won't process that data". The cookies thing is fast becoming a smokescreen which Phorm are hoping spreads out obscuring the real issue.

    The only way that the Opt In / Out must work (as a few people have pointed out) is for the Opt-In / Out to be done at an account level at the ISP. When you then connect, your account is checked and if you have opted out, your data goes straight to internet and goes nowhere near the Phorm servers. For those that Opt in (and I bet it would not be many), they go a different route via the Phorm servers.

    For Opt out, your data is then never intercepted, and there's no bloody chance of it *accidentially being processed* when Phorm turn off the ignore Opt out Cookies option in their software.

    Great work people and El reg for getting things this far, but lets not forget what the real issue is here.

    Rob

  9. Outsider

    RIPA

    It's quite interesting to go and have a look at RIPA.

    It's very very obvious that BT's actions constitute interception.

    That given reading the very short Section 3 detailing under what circumstances warrantless interception is legal makes BT/Phorm's insistence on the legality of their actions all the more interesting.

    Firstly the Act is most explicit that for warrantless interception outside the control of the state security apparatus the consent of BOTH sender and receiver should be obtained.

    Since this was not done we are left with a very very small loophole under Section 3 (3) (b) which states that telecommunications and postal operators may intercept communications for the provision and operation of that service.

    This is interesting for it states quite obviously that whatever is legal in electronic networks is also legal in postal ones which provides a whopping clue to any legal mind asked to define just what is allowable under this section.

    Incidentally...... there's no point in trying to go for BT under RIPA as the power to undertake action rests with the DPP alone. No private actions are allowable without the DPP's permission.

    It is interesting that if BT/Phorm believe they have acted legally they have effectively set a precedent allowing interception, analysis and distribution to third parties of private communications without consent if the interception is part of a trial of a system which MAY be implemented with some form of consent in the future....and this can be done to physical letters, phonecalls or IP data.

    Strangely it therefore appears that the State is more heavily regulated that communication carriers.

    The inactivity of the DPP in this matter is staggering...the precedent appalling.

    Truly the emperor BT has no clothes and, as usual, it is the laughing and jeering of the humble public that brings this to the attention of the intellectual and legal elite.

    Outsider

  10. Luther Blissett

    User's perception of the system

    www.lightbluetouchpaper.org - see link to Richard Clayton's technical description from a meeting with Phorm.

    Opt-in by itself is inadequate to the implementation as described, as that merely flags to the system whether the results of profiling web pages should or should not be retained. If the objection of contravening RIPA is to be avoided, the ISP must determine (not by a cookie, and not by a cookie "owned" by Phorm) whether Level 7 switching of user GETs is/is not to be performed into the Phorm system, i.e. opting out should really mean there is no interception of anything, and so no profiling by Phorm of opted out users. At present this is NOT how Phorm works.

    The compliance or otherwise of Phorm in any such manner MUST be determinable by the ICC or other independent competent authority on demand at any time (preferably without notice).

    Such a proposed modification would not compromise any "proprietary technology" of Phorm's, since the operation of the interception switch is always in the ISP's hardware. (Assuming no devious uneven handedness here - there is no doubt here to benefit Phorm). There cannot be any reasonable commercial objection to this technical mode of operating the system.

    The above is a necessary technical condition of acceptability of the Phorm intrusion. It is not a sufficient prudential one for various reasons. An important set of these revolve around the fact that the session user may not necessarily be the same person as determining the opt-in status, and may therefore expose personal data when browsing without knowing that it is happening.

    It may be time to print up lots of car window stickers like "BT 2 SPY ON U" or "Virgin could screw you".

  11. Joanne Connors
    Happy

    @Sam Share high

    Sam,

    The Share high was 3505.00 on Feb 25th this year

    Today it's closed around 1675.00 (insert sample of the laughing policeman here)

  12. Anonymous Coward
    Anonymous Coward

    @Sam

    Nothing quite beats a good gloat.

    http://www.iii.co.uk/investment/detail?code=cotn:PHRM.L&display=chart&it=le

  13. Bobby
    Stop

    Scaring people off the internet...

    You know guys this whole bloody disgraceful scam Bt entered into with this 121Media has done absolutely no good for anyone. They're scaring people off the internet for christ sakes. All this talk about hacking users accounts and legalising spyware by these rogues has seriously damaged any respect Bt or this government may have had.. Let the government we elected into office lay down the law once and for all and end this bloody farce.. As for Kent Ertugrul send him back to Russia on his Mig 29 where he can get back to writing up some new rootkits he's so good at and when it's all over the Bt monopoly should be broken up into more competitive companies as punishment.

  14. Anonymous Coward
    Stop

    Re: Interception of Communications Commissioner!

    @Parax: From the IPT's FAQ:

    "The Tribunal has no jurisdiction to investigate complaints about private individuals or companies unless you believe they are acting on behalf of an intelligence agency, law enforcement body or other public authority covered by RIPA.

    If for instance, you work in the private sector and you believe your employer has hired a private investigator to keep you under surveillance, this is not something the Tribunal can consider."

    So I don't see how they're going to be any use here. Not that we should need them. What BT and Phorm did is a straightforward crime under RIPA, it's an open-and-shut case, and the people we should be pressuring are the CPS, whose duty it is to bring prosecutions against criminals.

  15. Simon Davies

    Phorm meeting

    As highlighted in the Reg article, please do come along to the public meeting on Phorm next Tuesday (15th April). Details are at www.8020thinking.com/events

    You will have a chance to hear Phorm and Richard Clayton going head-to-head, and get involved in the dialogue.

    Simon Davies

    80/20 Thinking Ltd

  16. Alexander Hanff
    Stop

    Re: Interception of Communications Commissioner!

    No but the Tribunal can be used to issue a complaint against both the Information Commissioner and the Home Office for failing to enforce the law.

  17. Anonymous Coward
    Anonymous Coward

    opt in only come on people wake up

    If you read the update from PHORM correctly and read between the lines of what BT and PHORM have already stated BT will opt everyone in by changing their terms and conditions and you will not be able to do anything about it so rejoicing is premature.

  18. Anonymous Coward
    Anonymous Coward

    @Phorm Meeting

    Another chance to misquote, spin and drag verbal sentences out of context for the next 'Phorm Statement'.

    Also if it is a public meeting, shouldn't anybody who wants to go be allowed to. Or is this one where the attendee's are selected 'selectively' By Phorm.

    Oh and if the building is not big enough, perhaps get a bigger one. (Perhaps not - maybe a bigger pre-selection of attendees!)

    Hmm... I WONDER. How many people would honestly go to the meeting if they were Pro Phorm and had no other links with them apart from being employed by a PR company working for Phorm.

    Let me guess - Lets have a vote at the meeting.

    I can see the headlines now. 60% of attendees want Phorm. Its the best thing since rootkit's. Sorry - Slice bread!

  19. Andrew

    @ hi_robb

    "The only way that the Opt In / Out must work (as a few people have pointed out) is for the Opt-In / Out to be done at an account level at the ISP. When you then connect, your account is checked and if you have opted out, your data goes straight to internet and goes nowhere near the Phorm servers."

    At last, someone thinking along the same lines as me. I'm not with BT, but if I were I'd want my entire service opted-out at the connection level. After all, they know which pair of wires I came in on - it can't be difficult.

  20. Dangermouse

    To my MP, bless her...

    Dear Tessa Jowell,

    I note again that you have not responded to my last letter regarding Phorm and BT. The ICO has now concluded that the only way Phorms' illegal intrusion can be considered legal is by both parties consent; i.e. by the sender, me, and by the recipient, i.e. you, the receiver. If I had sent this message at the time under the trials, it would of been scanned by BT and Phorm.

    Bearing in mind that in Phorm's world, this entire message would have been scanned and profiled by Phorm without your permission, and that you would not have given permission to allow this to be scanned, how can you justify not seeking a criminal investigation against BT with regard to RIPA?

    BT conducted trial's in 2006 and 2007 and are doing exactly what I have highlighted and these trials are illegal.

    Can you start an investigation on my behalf against BT and Phorm, because of the rules of the Director of Public Prosecutions I cannot do this as a private individual.

    If I have interpreted these laws wrongly, please reply and correct me. If I haven't, why have you not raised this issue in the House as being illegal, under DPA and RIPA. Further to the issue, does not my correspondence to my MP come under the Wilson Doctorin? If I was suspected of nefarious intent by the Security Services, I would be expect to be and legally allowed to be subject to be monitored. Please explain to me the difference between the Security Services being allowed to monitor my activities by law under the Wilson Doctorin, and Phorm being allowed to monitor my activities for purely financial gain.

    Yours sincerely,

    Anthony XXXXXXXXXX

  21. DaveTheRave

    TalkTalk

    Statement by Talk Talk's Customer Relations team :

    I can confirm that as of June 2008 we will begin to offer our customers Phorm and Webwise services. This new service will help protect our customers from fraudulent websites and provides them with targeting advertising based on their web activity.

    For further information please go to www.webwise.com.

    Yours sincerely,

    Heather Lunt

    TalkTalk Customer Relations

  22. Will Godfrey Silver badge
    Happy

    @Paul Buxton

    Advice from CAB (me V telewest)

    They can't change T&C without your consent. New T&C means new contract and THEY have voided the old one. They try to bluff but as soon as you point out you are aware of this, they instantly back down.

  23. Anonymous Coward
    Thumb Down

    Look I'm no expert

    I have always felt that discussions about adequate anonymisation of data or Opt-in, Opt-out were a waste of time. Any acceptance of this system is a loss, the like of which no western democracy has suffered in many decades.

    The current PR stance Phorm are taking appears to be honestly admitting to anything that they couldn't hide or has been publicly 'outed'. That leads me to believe that they probably will abide by the limitation to adhere to website's robots.txt.

    However I do not believe that they will provide the name of the useragent of their phone tap, sorry Internet tap, sorry website robot, I get confused.

    So basically I think that their position is that because as a website owner you are prepared to spread your legs for Google you will do the same for them. Despite the fact that Google provides the life-blood of websites and they provide nothing, in fact less than nothing, if that is possible - they make revenue solely from the content of your websites and contribute nothing back.

    That 'less than nothing' statement refers to the fact that if you are not a member of the OIX you are very likely to have traffic driven away from your website by adverts on other websites purely because those visitors previously visited your website.

    This is a point that I have not seen outlined elsewhere - the fact that phorm would not exist without your blog, or your website to provide content and the fact that phorm will almost certainly use your content to drive traffic away from your website.

  24. MYOFB

    @ Jimbo Gunn

    1.) Who you are. (I thought I knew already, thanks for the offer)

    2.) The town you live in. (My village is a town?!)

    3.) The type or pron you like. (There are different kinds?)

    4.) Which banks you use. (I must be poor, I've only got one)

    5.) The newspapers you read and your political persuasion. (Dyslexia is a bitch!! Isn't that a euphemism for an MP getting into his/hers secretary's knickers/underpants?)

    6.) Your religious interests, if any. (I was under the impression that 'Religious Interests' and 'Political Persuasions' are one and the same thing. Please correct me if I am wrong. Or was that a euphemistic statement you made?)

    7.) The names of your best online friends. (Please tell, I haven't any in the real world!!)

    8.) Your best friends partners names. (My best friend has a Wife . . . you Sinner!)

    9.) If you have any pets. (That's too easy, I have about 6 billion and they all live at the top of the food chain, apart from you)

    10.) Everything you buy online. (Do you work for Phorm?!)

    11.) Your employer. (That would be ME!!)

    12.) Your next employer. (That would be BEELZEBUB!!)

    13.) Your proficiany in spelling. (Better than your proficiency in spelling!)

    14.) The state of your physical and mental health. (Deteriorating by the second due to my urge to categorise you in the Phuckwit Department)

    15.) If you're over weight. (You mean 'Overweight', correct?!! I am lighter by at least one space bar you obese git and then some!!)

    16.) What your foot size is. (12 inches . . . but my shoe size is a broad fit 9 or a medium 10 but that depends on the brand)

    I apologise if I come across as being derogatory of your post but I am more interested in what you can tell me, from my last 'month's web browsing history' about my alien abduction experience, the voices that talk to me in my head, Area 51 and the Roswell Incident.

    If you can shed some light on any of them, then you will have convinced me of 2 things . . .

    1. I'm still on the planet called Earth . . . and

    2. You are not!!!

    Thank you for taking time to complete our survey . . . we will send you a copy of the results as soon as they become available.

  25. Alex

    This is all smoke and mirrors

    The ICO is still giving the green light, I'm highly skeptical of 80/20's proposed "village hall debate" as this all sounds far too contrived.

    Why pray tell, are they all side stepping the illegal trials, do you think?

    Actions were taken by individuals during these trials, I don't doubt that approvals were given, blind eyes were turned & job prospectuses were mooted.

    Who do you think was working on the BT Phorm project in those giddy live & illegal trials then?

    Time to join the dots people...

    "Hammers do fall and Heads do roll"

  26. Simon Davies

    Re: Phorm Meeting

    "Also if it is a public meeting, shouldn't anybody who wants to go be allowed to. Or is this one where the attendee's are selected 'selectively' By Phorm."

    It's always a good idea to read the background material before posting.

    This meeting is open to all. Just send an email to info@8020thinking.com so we can make sure you have a seat.

    And for the record - yet again - this event is being organised by 80/20 Thinking, not Phorm.

  27. Anonymous Coward
    Thumb Down

    conflict of interest?

    Who's paying 80/20 Thinking Ltd to organise this disneyworld sounding 'town hall meeting'? Phorm? Privacy International? Little green men? Fipr? The ICO? Or whom?

  28. 3x2

    err yea but

    Phorm's entire business plan depends on their system being opt-out (no, honest). It cannot work if we have a genuine option. Perhaps that's the reason for their recent rapid share price decline - even short traders have their limits.

    I, the undersigned, have no problem allowing you, my ISP, to wire-tap all my activities on the net. I feel that the promise of of "a better, more relevant Internet experience" is worth you shafting me up the back passage and charging me for the experience.

    Signed - ???

  29. Anonymous Coward
    Anonymous Coward

    @Simon Davies Re: Phorm Meeting

    Sorry Simon, but please don't feel too offended, but since you seemingly (to me) did little initially to squash Phorm's tie in with yourself (80/20) and Privacy International who they wrongly (deliberately?) initially misquoted, I no longer see much difference between 80/20 and Phorm in terms of what side of the fence they sit.

    Please excuse me also if I didn't read your strong statement of anger after the initial press statements from Phorm quoting PI and not 80/20, but I must have missed them as well. Feel free to point me in the right direction.

    Anyhow, public meetings should be just that. I shouldn't need to email if I wish to attend. I may also wish to have some privacy!

  30. 3x2

    T&C

    <...>They can't change T&C without your consent. New T&C means new contract and THEY have voided the old one. They try to bluff but as soon as you point out you are aware of this, they instantly back down.<...>

    And they are quite right. Consider the absolute bollocks that would be made of our economy if everyone could just change the terms of a contract whenever they felt like it. You signed contract A and without your consent contract B is just wishful thinking on the part of your ISP (in this case)

  31. 3x2

    DPP

    <...>Incidentally...... there's no point in trying to go for BT under RIPA as the power to undertake action rests with the DPP alone. No private actions are allowable without the DPP's permission.<...>

    <...>The inactivity of the DPP in this matter is staggering...the precedent appalling<...>

    And that is everything. Minimum 18000 counts of breaching RIPA and still no action. One could almost believe these clowns were more worried about their share portfolios when considering legal action. Lets face it - caught tomorrow wire-tapping an ex-girlfriend - two years. 18000 wire-taps?

  32. Anonymous Coward
    Thumb Down

    did Ertugrul collect and _store_ that data, he said he has data you can disassociate from!

    http://www.marketingvox.com/phorm-comes-out-rosy-on-concerns-over-ripa-037929/

    "In a phone interview yesterday, Ertugrul said that in two weeks Phorm will start serving banner ads _that inform users their information_ _is_ _being collected_.

    The ads will enable them to opt out.

    To disassociate themselves from _whatever_ _data_ Phorm _has_ on them _now_, users can just clear their cookies, he said."

    BT still dont seem to get it, http://www.cableforum.co.uk/board/attachments/12/attachment-16134d1207782812-bt2customer_choice_diagram70.gif

    you cant break the RIPA to find out if your can have RIPA permission.

    and you cant ask for permission, get a feck off "NO", then go putting a data cookie on someones PC and so break the

    The Privacy and Electronic Communications (EC Directive) Regulations 2003

    http://www.opsi.gov.uk/si/si2003/20032426.htm

    Confidentiality of communications 6

  33. Anonymous Coward
    Coat

    Re: PhormPRTechPRTeam here...

    You do not know how right you are.

    There was a boat around the time of the trials shipped on the A14. So big that it barely passed under the bridges and the transporter took both lanes.

    Funnily enough, besides the police escorts instead of a highway agency escorts it WAS ESCORTED BY VANS IN BT LIVERY!!!

    Nuff said. Me coat, the one with the BT ID

  34. Stephen Jenner
    Unhappy

    There will be a reason why customers will WANT to opt in.

    I don't like Adobe Flash adverts rolling or snaking across my display, when I am trying to read The Register. So I look at Flash configuration and discover, that I can opt in, or opt out....

    So I opted out....

    Great , no silly, irritating ads.

    Also, some time later.... I discover... no Youtube either, so I have to opt back in.

    You see what I am getting at, if ISP/Phorm REALLY WANT you to opt in, they will find a way.

    The only way to really protect yourself from this sort of crap is to use an ISP that doesn't get into bed with the likes of Phorm.... I like Zen.

  35. Tony Paulazzo
    Paris Hilton

    Well, if you can believe BT...

    they say,

    >In the subsequent trial the ICO said: "We have spoken to BT about this trial and they have made clear that unless customers positively opt in to the trial their web browsing will not be monitored in order to deliver adverts." <

    http://news.bbc.co.uk/1/hi/technology/7331493.stm

    Which IS good news, because if it can be proved, after opting out, that any profiling is going on (not sure how easy that would be to find out - maybe an AC mole from within), then they could be hauled into court by private individuals.

    As for the other end of the equation, ads being shown on websites, wouldn't they only be shown on those websites that took payment for advertising anyway, ergo, none would be shown if someone visited my website as there is no advertising on my site, or like, Google sponsored ads wouldn't be replaced by OIX ads, only OIX sponsored web sites would show targeted ads. Or am I being totally stupid?

    Paris, just in case I am.

  36. Peter White
    Stop

    don't rejoice to quick

    phorm have published their results for 2007, it is at

    http://www.iii.co.uk/investment/detail?code=cotn:PHRM.L&display=news&it=le

    a couple of bits out of it make interesting reading

    "Phorm, Inc. ("Phorm" or the "Company")

    Preliminary Results

    Phorm (AIM: PHRM and PHRX), the advertising technology company, today announces

    its preliminary results for the year ended 31 December 2007.

    Operational Highlights:

    Year to 31 December 2007

    * Reorganisation of the Company from 121Media, Inc. to Phorm, Inc

    completed

    * Focus on preparation of OIX and Webwise technology and development

    of relationships with ISPs, publishers and advertisers

    * Successful $30 million equity fundraising completed

    * Several senior appointments made

    Q1 2008

    * OIX and Webwise successfully launched in February 2008

    * Exclusive agreements announced with ISPs BT, Talk Talk and Virgin

    Media, representing nearly 70% of the UK broadband user base

    * Consumer trials are expected to begin in the near term, followed by

    roll-out across these networks

    * Significant progress made with the advertising and publishing community

    * Advanced talks with other ISPs both in the UK and internationally

    * Independent report by Ernst & Young published, supporting Phorm's

    commitment to privacy protection

    * Positive initial feedback received from a number of regulatory bodies

    * Successful $65 million equity fundraising completed

    Executive Chairman's statement

    Introduction:

    During the year under review, Phorm made significant progress, both in terms of

    its corporate development and in executing the Company's Internet Service

    Provider (ISP) relationship strategy, providing a solid foundation on which to

    take the business forward to the next stage of its development. As a result of

    our hard work, I am extremely happy to report that on 14 February 2008, we

    announced exclusive agreements with BT, Talk Talk and Virgin Media, further

    details of which I have provided below."

    "Furthermore, we continue to be in advanced discussions with a number of other

    ISPs, both in the UK and internationally, and following extensive due diligence

    we have moved into the trial phase with a number of them. It is worth noting

    that we believe we are selected as the preferred partner by leading ISPs over

    our competitors based on the capabilities of our technology, our team and our

    approach to privacy. We will provide an update on these discussions in due

    course, when appropriate."

    "A key differentiator of Phorm's technology is our ability to dispel the myth

    that in order to provide relevant advertising on the internet you need to store

    data. The fundamental principles behind our platform support the highest

    standards in user privacy and anonymity:

    * Phorm will not and cannot ever store any personal information which can

    identify a user

    * Users will have a clear choice whether to turn Webwise on or off

    * Our technology complies with all relevant data protection and privacy laws

    including RIPA (Regulation of Investigatory Powers Act) and the

    Data Protection Act

    It is very pleasing to see that our commitment to these principles, and to open

    and transparent disclosure, has been recognised by leading privacy advocate

    Simon Davies, Managing Director of privacy consultancy 80/20 Thinking and

    director of Privacy International. Mr Davies and 80/20 Thinking recently

    conducted an interim Privacy Impact Assessment of our technology.

    Also, as part of our commitment to the privacy of internet users, we

    commissioned Ernst & Young to conduct an independent examination of our systems

    and assertions. The following components of our privacy programme were examined:

    * Phorm's privacy policy, controls and procedures

    * Phorm's compliance with its stated privacy policy

    * Phorm employees' privacy policy training and compliance

    * Data retention, integrity and security policies and procedures.

    The resulting attestation report we received from Ernst & Young confirmed that

    our systems have been designed specifically to protect the identity and other

    sensitive information of consumers - a great validation of our offering.

    Furthermore, we have initiated a dialogue with the Information Commissioner's

    Office who are pleased with the way that we have engaged with technical experts

    and concerned individuals following the announcement of the service. We have

    also met with many other leading stakeholders in the area of online privacy, to

    share details of our technology and the response to date has been very

    encouraging.

    Finally, during the course of 2007, we appointed leading global professional

    services firm Deloitte & Touche LLP as auditor to Phorm."

  37. Anonymous Coward
    Black Helicopters

    BT guilty of interception??

    Hmmm, I seem to remember driving past the BT Microwave repeater site at Hunters Stones, which court documents revealed passes *everything* over to the "We are Not Here" Agency. (which has a token RAF person present) see <http://cndyorks.gn.apc.org/mhs/mhshist.htm> but at least the NSA don't (yet) hit us with targeted Adverts. BT is a Government organisation!

  38. Andy ORourke
    Thumb Up

    Democracy works!

    I just checked the early day motion and found my MP has signed (although rather dissapointed to see only 16 signatures) after I wrote to my MP I got a reply telling me he would look into this and it looks like he did what he said, Phuck Me, I might even vote this time round! <-JOKE!!

    Maybe, just maybe, the start of the end for a badly thought out system. Now if someone where to offer a system that eradicated all internet advertising (Espescially the F**king intrusive spinning CD on El Reg's pages) then I would sign up to that one.

    Now if only we could get Phorm to just understand that the system is wrong, just plain wrong?

  39. SilverWave
    Paris Hilton

    Opt-in is the killer blow.

    =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+

    Phorm's business model is broken!

    Opt-in is the killer blow.

    90% of projected revenues just went south.

    =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=

    Paris icon - as its not rocket science :)

  40. Anonymous Coward
    Unhappy

    Virgin Media's Silence

    Well, VM must be panicking. I just called to pay my extortionate bill and asked to speak to someone concerning Phorm. I was met with an unshakeable "I am not authorised to discuss this matter" response; and she was the Customer Services Manager. Schmarmy bitch more like.

    I'm warning you Virgin - you're pissing me right fucking off with this and you WILL lose my custom if you proceed with the pathetic and frustrating brick-wall approach of 'no comment'.

    Grrrr.

    And opt-in seems to me like a smoke-screen. I believe the profiling/mirroring still takes place and it's just the accumulative cookie that's not written to. And as a webmaster/publisher it's still a total breach of my/my clients copyright and privacy if they intend to continue with their current model.

    STILL DO NOT WANT.

  41. Chris Simmons

    Forbes story 09:30(ish) this morning

    Phorm are really trying to spin now:

    http://www.forbes.com/markets/feeds/afx/2008/04/10/afx4874033.html

  42. Anonymous Coward
    Happy

    COME ON!

    Hopefully this is the beginning of the end for Phorm and any other system like it!

  43. Anonymous Coward
    Flame

    RE: Phorm Meeting

    LISTEN - there's nothing to discuss. The system is a pile of shit that *MUST* be stopped. Why don't you go and do something productive instead?!

  44. Anonymous Coward
    Anonymous Coward

    New business model?

    Maybe BT will offer it's ill informed customers a new advert driven service?

    £6.99 a month unlimited broadband as long as you allow Phorm to give you irrelevant ads and sell your details to any spammers that are willing to pay?

    Or they could block BBC iPlayer streams unless you "opt in" to Phorm to help them pay for the bandwidth!

  45. David
    Stop

    Lies, Damn Lies and Phorm PR

    Just read K(u)nt's response to the ICO's report

    "We now have a statement from the Home Office and the Information Commissioner saying not only is there no privacy issue but there is no interception issue either." ...

    ..."The more people understand what we are doing the more comfortable they get with it,"

    http://news.bbc.co.uk/1/hi/technology/7339263.stm

    Now I know I don't do doublespeak as well as him, but to my untrained eye it says nothing of the sort, at best it says that there could be privacy issues and interception issues. As for people getting more comfortable with the idea, surely the ICO growing a spine and coming out against phorm, as well as Richard Clayton's comments, are proof that people are getting LESS comfortable with phorm's disgusting plan's. I always hoped the advertising industry would destroy itself, I never thought I'd get to see it happen!

  46. alistair millington
    Coat

    I like this, more fodder for the circling sharks

    But... People writing letters to MP's and expecting a reply.... Tessa Jowel... As if...

    LOL, as if they care about normal people.... As if they care about people breaking laws anymore...

    Oh, wait... What do you mean there's a vote coming up.

    Ahhhh... Mines the one with the "How to postal vote" guide in the pocket. (as if not having time is the reason for people not voting)

  47. Chris Simmons

    VM...

    ...have just told me (poor little customer service girlie) that if I go to www.virginmedia.com/customers/webwise.php I can OPT-OUT of the service. What a phucking pile of crap.

    First of all that page was just the PR shit about webwise with no opt-out or opt-in options and secondly I guess no-one has bothered to tell the call-centre monkeys that it should be opt-in only; I spent more time on hold than I did talking to anyone with any knowledge (maybe that should be a 1:0 ratio).

  48. Anonymous Coward
    Stop

    BT

    ...should be nationalised.

    Hmmm... Could be tied in with the Post Office. Post Office Telephones? How does that sound?

    @Stephen Jenner --- Flashblock is my very favourite Firefox ad-in, even more than adblock. Avoid those horrible animations, let alone the ads :)

    Public meeting.... So who's going, then? And where on that agenda is the time allowed for public participation?

  49. Anonymous Coward
    Anonymous Coward

    @Virgin Media's Silence

    It appears that VM are still perched on the fence, waiting to see how this goes. I spent about 30 mins yesterday talking to one of the VM guys attached to the CEO's office, and his bottom line was that VM are waiting to see the results of their own internal discussions on Phorm/Webwise, and it appears that this is very much influenced by the public backlash on this matter. They can see there are privacy concerns, but seemed to also believe that Phorm's history was the main issue here, rather that having ANY unknown 3rd-party server and software in the VM datacentre means that they cannot guarantee anything about what happens to customer data.

    I got put through to the CEO office after raising a complaint about the paucity of information in the standard letter VM sent me about Phorm, which was nothing more than a rehash of Phorm's PR release. The first lady I spoke to, who had sent me the letter in the first place, obviously didn't know a thing about the whole debate, and thus shouldn't have put her name on the letter. Her attitude seemed to be "Well, what do you want? I want rid of you", before she quickly folded and put me on to her manager.

    Her manager was more useful, and mentioned that Webwise was supposed to be in place by now, but wasn't because of media and public backlash. This didn't square with the CEO office guy, who said that they are still very much in the initial stages of exploring the technology, so something doesn't quite add up there.

    Anyway, you too can speak to the CEO's office. Just log a call with the helpdesk and ask to be put through to a manager, then ask to be put through to the CEO's office.

    (I had a sudden thought during the conversation that Phorm could still be viewed as actually still being in the spyware business, but have almost pulled off a massive coup: Having failed to profit from installing spyware on individual users' machines, they've managed to install spyware in the ISP's datacentre, thus ensuring a huge coverage! Wow! Instead of tricking users into installing spyware, they're tricking ISPs!)

  50. Anonymous Coward
    Joke

    If you think this will make any difference...

    How many Phorm techies does it take to change a light bulb?

    None. They just get their PR agency to issue a press release stating that black is light. Then there's no need to change the light bulb. Job done.

    (Actually, they send the statement to the BBC, who publish it verbatim cos light bulbs are a bit too technical for their reporters to investigate for themselves.)

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