• by Wendy Davis , Staff Writer @wendyndavis, April 22, 2008

Behavioral targeting company Phorm is facing more challenges in the U.K, where it's already come under fire for its proposed data collection methods.

The BBC reports that online security companies are mulling developing programs to automatically delete the cookie that Phorm will place on users' computers. Phorm, which plans to launch soon, gathers information about users' clickstreams via three Internet service providers in the U.K. -- BT, Virgin and Carphone Warehouse. Phorm uses that clickstream data to figure out whether users are potentially interested in buying products from marketers it works with and then places information used to target people on cookies on their computers.

Phorm says its software is non-intrusive and that it will delete all clickstream data that isn't useful to its marketers, including clicks relating to health conditions or other sensitive matters. But some in the U.K. are questioning whether the technology infringes on people's privacy. The nonprofit think tank Foundation for Information Policy Research, for one, is on record stating that Phorm should obtain users' agreement before deploying its "highly intrusive" data collection methods. Currently, Carphone Warehouse is seeking consumers' explicit consent, while the other two ISPs are opt-out, according to the BBC.

With security vendors considering software that deletes the Phorm cookie, and Phorm considering deploying its technology without first obtaining users' consent, it appears inevitable that a showdown is looming among behavioral targeting companies, software vendors and privacy advocates.

In the U.S., this battle has already begun. And, one way or another, it will be shaped by government -- either regulators, legislators or the courts. Privacy advocates are currently pressing the authorities for regulations or new laws, and some states like New York are currently mulling whether to legislate interactive marketing strategies. Adware companies like Zango, meanwhile, are taking software vendors to court for deleting programs used for ad-serving.