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Editor: Matt Paines

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EU action on latest internet marketing technology

News that the European Commission has started legal action against Britain over the online advertising technology Phorm reminds us again of the moral complexities of the latest, cutting edge, internet marketing techniques.

The move follows complaints to the EC over how the behavioural advertising service was tested on BT's broadband network without the consent of users.

However, officials in the UK said last year that they were happy Phorm conformed to European data laws.

But the commission has said Phorm intercepted user data without clear consent and the UK needs to look again at its online privacy laws.

Meanwhile, Phorm believes its technology is fully compliant with UK legislation and relevant EU directives and the Commission's legal action would have no impact on the company's future plans.

At the heart of the legal action by the EC is whether users have given their consent to have their data intercepted by the advertising system.

Phorm works by trawling websites visited by users, whose ISPs have signed up to the service, and then matches keywords from the content of the page to an anonymous profile.

Users are then targeted with adverts that are more tailored to their interests on partner websites that have signed up to Phorm's technology.

The technology differs from other behavioural advertising systems which tend to use data only from partner websites visited by users, and do not work in conjunction with internet service providers.

A spokeswoman from the commission is reported as saying the EC wanted the UK to ensure there were procedures in place to establish clear consent from the user for his or her private data to be used in this way.

At present, UK law only covers intentional interceptions and requires there only to be a reasonable grounds for believing that consent to interception has been given.

Whilst Phorm may confirm to UK laws, any EU ruling against the technology may force a rethink for British lawmakers.

And whilst behavioural advertising can be useful for businesses and consumers, developers face a minefield when interpreting existing rules and regulations on data protection.

They also need to consider that any perceived invasion of privacy will offer more ammunition to campaigners opposed to any pro-active marketing on the internet.

This news is followed today by the controversy surrounding Google's intention to offer "tailored" advertising according to data collected against online activity.

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