April 2, 2008

UK Telecom Giant Questioned for Illegal Web Tracking

BT Group plc carried out an online ad system involving more than 30,000 of its customers that one leading digital rights lawyer said may have been illegal.

BT tested a prototype of Phorm, a digital technology that uses ISPs to deliver targeted advertising based on a user's profile.

However, the company failed to tell customers that they were involved in the trial, which took place in 2006 and 2007.

"Tests without the knowledge of users is an illegal intercept of the users' data," said Nicholas Bohm, of the Foundation for Information Policy Research.

A spokesman for BT would not comment about the legality or illegality of the 2006 test.

The firm said in a statement the trial was a small scale technical test of a prototype advertising platform.

"The purpose of the test was to evaluate the functional and technical performance of the platform."

The statement also said: "It is important for BT to ensure that before any new technologies are deployed, they are robust and fit for purpose. No personally identifiable information was processed, stored or disclosed during this test."

BT told BBC News that before the 2007 test it had taken "legal and other external advice... and on the basis of that advice commenced the small scale technical test in good faith".

The 2006 trial involved 18,000 customers and the 2007 test was reportedly on a similar scale.

Virgin Media and Talk Talk are also planning to use the technology even though neither have trialed the system in the past.

The Foundation for Information Policy Research has written to the Information Commissioner to argue that Phorm contravenes the Regulation of Investigatory Powers Act 2000 (Ripa), which protects users from unlawful interception of information.

Phorm and BT claim the technology complies with UK law as customers have to give informed consent to use the technology.

According to BT, customers will be issued with amended terms and conditions before any eventual roll out of the technology.

Next month the company will be approaching 10,000 customers for a third test of the system.

"If the customers in 2006 and 2007 weren't invited to do anything and it was completely surreptitious, and assuming that BT and Phorm trialed a version of what they are planning to launch later this year, then it was a massive scale illegal interception," said Bohm.

Bohm said they couldn't at that stage have had any guidance from the Home Office, or had anything in writing, as nothing was issued until January this year.

"This was highly intrusive and highly objectionable to set up a profiling system based on their customer's online activities, especially since the customers knew nothing about it," said Bohm.

Fipr claims that for the operation to be legal, Phorm must not only seek the consent of web users but also of website operators.

Phorm's system works by "trawling" websites visited by users and matching keywords from the content of the page to a profile. Users are then targeted with adverts that are more tailored to their interests on websites that use Phorm's technology.

Phorm has said its technology will improve the internet experience for users as they will receive more relevant adverts and it will boost the finances of websites because adverts will reach more targeted audiences.

BT Group plc, formerly British Telecommunications plc, is the dominant fixed line telecommunications and broadband Internet provider in the United Kingdom.


On the Net:

BT Homepage: http://www.bt.com/

Phorm Site: http://www.phorm.com/