Online retail giant Amazon said today that it won't allow behavioral targeting company Phorm to glean data from Amazon's U.K. Web sites.
The move comes one day after the European Commission
said it was commencing legal proceedings against the U.K. regarding Phorm, which so far has the
blessing of British authorities.
Phorm serves ads to Web users based on information about their online activity gleaned from ISPs -- which riles privacy advocates for a few reasons. Broadband
providers have access to all Web activity, including queries at search engines and visits to noncommercial sites; older behavioral ad companies only glean information from specific sites within a
network.
Additionally, Phorm conducted secret tests of its platform in 2006 and 2007, which arguably violated Europe's sweeping privacy laws. Advocates have been urging the authorities to
condemn the company for those tests.
Phorm says it doesn't store personal data or browsing histories and that it sought users' opt-in consent for its most recent test.
Apart from
consumers' privacy concerns, Web companies like Amazon have also have reason to feel threatened by Phorm.
Currently, if someone visits Amazon and, say, browses the site for digital cameras,
only two companies currently have access to that information: Amazon and the user's Internet service provider. The last thing Amazon should want is for, say, Canon to be able to reach that user
independently. Ditto with Google, Yahoo or any other publisher.
For now, the U.K. broadband provider BT Group allows publishers as well as consumers to opt out of Phorm's platform. At this point, unless Phorm intends to offer publishers
some sort of incentives, it's hard to see why they would allow the company to gather information about their visitors.