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Home Office 'colluded with Phorm'
By Darren Waters
Technology editor, BBC News website

The Home Office has been accused of colluding with online ad firm Phorm
on "informal guidance" to the public on whether the company's service is
legal.

E-mails between the ministry and Phorm show the department asking if the
firm would be "comforted" by its position.

The messages show Phorm making changes to the guidance sought by the
ministry.

Lib Dem Home Affairs spokeswoman Baroness Sue Miller, who has questioned
the Home Office about Phorm, said the e-mails were "jaw dropping".

No-one from the Home Office was immediately available for comment.

The e-mail exchanges were released under a Freedom of Information (FOI)
Act request made by a member of the public and sent to the BBC.

More information

The exchanges between the Home Office and Phorm date back to August
2007, in which the ministry asks the company for more information about
the technology following a request made by Phorm for a view on its
technology.

The Home Office has said previously that exchanges were about helping
the department understand "public safety considerations and legal
obligations" about behavioural advertising in general.

“ If we agree this, and this becomes our position do you think your
clients and their prospective partners will be comforted ”
Home Office e-mail to Phorm

Phorm serves up adverts related to a user's web browsing history that it
monitors by taking a copy of the places they go and search terms they
look for. Adverts related to that history are put on any websites that
have signed up to use Phorm.

So far BT has signed up to use the system, and carried out a series of
trials, some of which were conducted without the consent of its users,
sparking an outcry among privacy advocates.

“ Phorm believes it is the victim of an orchestrated "smear" campaign ”
Darren Waters, Technology editor, BBC News website

The European Commission has also separately started legal action against
the UK over the use of Phorm.

The commission said Phorm "intercepted" user data without clear consent
and the UK needed to look again at its online privacy laws in order to
better protect consumers.

E-mails from legal representatives of Phorm released under the FOI Act
show the company repeatedly asking the Home Office if it "has no
objection to the marketing and operation of the Phorm product in the
UK".

Advertising platform

The Home Office has denied that it has provided "any advice to Phorm
directly relating to possible criminal liability for the operation of
their advertising platform in the UK".

However, e-mail exchanges over a series of months between the department
and the firm show the Home Office asking the firm what it thinks of the
advice it is drawing up in relation to behavioural targeted advertising,
and making specific reference to Phorm's technology.

“ Anything the Home Office now says about Phorm is completely tainted ”
Baroness Miller

In an e-mail dated August 2007, an unnamed Home Office official wrote to
Phorm's legal representative and said: "My personal view accords with
yours, that even if it is "interception" , which I am doubtful of, it is
lawfully authorised under section 3 by virtue of the user's consent
obtained in signing up to the ISPs terms and conditions."

In an e-mail dated 22 January 2008, a Home Office official wrote again
to Phorm and said: "I should be grateful if you would review the
attached document, and let me know what you think."

Some e-mails were sent from the Office of Security and Counter Terrorism
at the Home Office.

Making deletions

In January 2008 the Home Office thanks Phorm for comments and changes to
its draft paper, which show the company making deletions and changes to
the document.

The Home Office official wrote to Phorm: "If we agree this, and this
becomes our position do you think your clients and their prospective
partners will be comforted."

Baroness Sue Miller, Liberal Democrat spokeswoman on Home Affairs, told
BBC News: "My jaw dropped when I saw the Freedom of Information
exchanges.

“ This is untrue and misrepresents the way in which the British legal
system works ”
Phorm chief executive Kent Ertugrul on accusations of collusion

"The fact the Home Office asks the very company they are worried is
actually falling outside the laws whether the draft interpretation of
the law is correct is completely bizarre."

She added: "I couldn't be more surprised [that] the very department
drawing up policy to protect people's privacy is being that cynical.

"Anything the Home Office now says about Phorm is completely tainted."

Baroness Miller said the Home Office most likely consulted Phorm because
"they didn't have the capacity to understand the technology they are
dealing with".

"But there people in academia with that knowledge," she added.

In a letter to the Guardian responding to an article written by Baroness
Miller, Phorm's chief executive Kent Ertugrul denied there was any
"collusion" between the firm and the Home Office.

He wrote: "This is untrue and misrepresents the way in which the British
legal system works."

He said the advice given by the Home Office was "an informed opinion on
ISP-based targeted advertising, but in the United Kingdom it is for the
courts to decide what is or is not legal, not the Home Office".

Baroness Miller said she was concerned that the Home Office was "very
interested in the technology" for its own purposes.

However, Mr Ertugrul said it was "misleading to invent a link between
Phorm's innovative technology and the Government's plans for
counterterrorism" .

Phorm has consistently defended its technology, saying it offers greater
privacy protection than rival systems, and that it could help generate
fresh sources of advertising revenue for websites.

The company has also stressed it believes consumers will benefit because
they would receive more relevant adverts.

The company has launched a website, which it says is aimed at stopping
the "orchestrated smears" against Phorm.

Jim Killock, executive director of privacy campaigners, the Open Rights
Group, said: "The Home Office's job is to uphold the law: not to
reinterpret it for commercial interests. It's extraordinary, when you
think of the blatant disregard Phorm showed towards UK laws in its
secret trials, that this sort of lax attitude should be shown."

Story from BBC NEWS:
http://news. bbc.co.uk/ go/pr/fr/ -/1/hi/technolog y/8021661. stm

Published: 2009/04/28 07:53:22 GMT