• November 2, 2008

Behavioral targeting company Phorm lost a potential partner last week when the U.K. mobile and broadband provider Orange said it would not work with the controversial company because of privacy concerns.

"Privacy is in our DNA, so we need to be honest and clear about what we are doing," said Paul-François Fournier, senior vice president of Orange's online advertising division, according to the Financial Times.

Phorm's platform collects information about people's Web activity from their ISPs and then serves users targeted ads. Consumer advocates say that broadband provider-based behavioral targeting is far more intrusive than other types of targeting because Internet service providers have access to every site users visit--including non-commercial sites, as well as to all of their search activity.

Several weeks ago, Phorm launched a new test of the program with Internet service provider BT Group. Previously, Phorm failed to notify users about the test, but the most recent trial requires subscribers' opt-in consent.

Two other U.K.-based Internet service providers--Virgin and Carphone Warehouse--previously said they intended to work with Phorm, which is registered in the U.S. and has offices in New York and London.

Earlier this year, would-be Phorm rival NebuAd suspended plans to continue testing a similar behavioral targeting platform in response to congressional concerns about privacy.--Wendy Davis