• by Wendy Davis  @wendyndavis, October 13, 2008

European Union privacy officials are continuing to keep up the pressure on controversial behavioral targeting company Phorm.

 

In the latest development, the European Commission's Information, Society and Media division, headed by Viviane Reding, last week sent a second letter questioning U.K. authorities about Phorm. "The European Commission takes data privacy of citizens very seriously and therefore is asking the UK authorities to ensure that they fully comply with their obligations under EU law," according to Martin Selmayr, spokesperson for Reding's office, in an e-mail to Online Media Daily. The Commission asked the U.K. officials to explain how they "have protected the privacy of U.K. citizens with regard to Phorm in the past, and how they intend to do so in the future," Selmayr stated. The regulators requested an answer within one month.

A spokesperson for the U.K.'s Department for Business, Enterprise and Regulatory Reform said the agency had received the letter and intends to respond. Europe's sweeping privacy law provides that companies can only use personal data with people's informed consent.

Phorm, registered in the U.S. and with offices in New York and London, works with broadband providers to serve ads to subscribers based on their Web-surfing and search histories. While Phorm's platform is anonymous in that it doesn't collect users' names or e-mail addresses, privacy advocates worry that clickstream data could be traced back to individuals.

Phorm currently says it will only deploy Webwise for subscribers who have affirmatively agreed to participate in the system. But in 2006, Phorm and BT tested the platform in secret--that is, without notifying subscribers or letting them decide whether to be tracked.

Reding's office previously asked the U.K.'s Department for Business, Enterprise and Regulatory Reform what, if anything, it intended to do about that 2006 test--which arguably violated the EU's privacy rules.

Last month, the U.K.'s Department for Business, Enterprise and Regulatory Reform cleared Phorm for more tests. At the time, the department said that Phorm's platform was legal because the company said it would notify users about the system and obtain their consent before deploying it.

The week after that report was issued, broadband company British Telecom said it would launch a test of Phorm's Webwise platform.

In the U.S., Phorm rival NebuAd suspended plans for additional tests of its platform in response to pressure from lawmakers. Three major broadband companies recently testified at a Senate hearing that they would not track subscribers for ad-serving purposes unless they had explicitly consented.