i2015 or the New EU Digital Strategy

The New EU Digital Strategy which is currently being shaped by the EU will put consumers at the core of i2015, the EU`s action plan for digital economy. In effect, this means creating a consumer-friendly single market for online services.

Relatedly, the new incoming Spanish EU President is also shaping his digital agenda which is rumoured to make the use of VoIP mandatory on mobile handsets. If this does happen, it will no doubt have a significant impact on traditional telecom service providers as well as on principles of net neutrality. i2015 should be delivered in spring 2010 so not long to go now before we can ascertain its detailed contents.

Phorm is being rolled out.

The Government has stated that Phorm, the online ad system, will be rolled out in the UK. Avid readers of CyberPanda will remember that this issue was covered earlier this year when the EU questioned the lawfulness of Phorm especially in the context of data protection laws. The EU asked the Government to clarify the manner in which the system tracked the web habits of net users.

The Government has now clarified the manner in which the tracking will be done. In a nutshell, trials of the tracking will only be done with the consent of the net users being tracked. In the words of the Government to the EU: 'Users will be presented with an unavoidable statement about the product and asked to exercise choice about whether to be involved. Users will be able to easily access information on how to change their mind at any point and are free to opt in or out of the scheme (my emphasis).'

The Office of the Information Commissioner has already issued its response to this statement and is in the process of analysing the reply as well as undertaking a legal assessment of the situation in the UK. So the situation is far from being resolved. It seems that the better solution would have been for the UK government to wait for the response of the Commissioner before proceeding to roll out the system here.

Phorm argues that the system is legal: profiles of the users are created on the unique ID of the user rather than the identity of the user. Phorm also argues that it does not have any information which would enable it to link the user ID to the user. One still wonders what the ID of the user reveals about the identity of the user. Surely it must contain some unique characteristic of the user in question.

Another issue is the legality of the trials which were carried out without the consent/knowledge of the net users before the EU intervened. Police investigation is currently been carried out on this matter following several complaints by tracked users, so this matter is also pending.

Phorm raising a series of complex legal and commercial issues including data protection, rights of other content owners and privacy and the Government should have awaited the final determination by the EU before proceeding forward with the launching of the project here. But yet again, it seems to be a situation of act now and take it down later if it offends.

Disclaimer: The rights to the logo used above belongs to Phorm.

Six degrees of separation between you and the advertisers.

The EU Commissioner, Viviane Reding, as asked the UK Government to clarify whether the use of the Phorm system is in breach of EU data protection laws in May 2008. the Government has to respond by August 2008.

Phorm is a digital technology company which has launched Open Internet Exchange ('OIX') and Webwise, which enable targeted advertising, based on the browsing habits of the users. Phorm has been in talks with some of the biggest ISPs in the UK; namely BT, Virgin Media; and TalkTalk, to this end. The attraction for ISPs and advertisers is clear as the closer the match the better. Advertisers are able to reach their target audience and the platform gets more revenue as the chances of the advertisements being clicked on by the end-user is far greater.

A quick read through the website of Phorm seems to suggest that this is a perfectly harmless activity which will improve the web experience of the user drastically. One has to wonder when an advertisement has improved the experience of its audience. Most of the time, online advertisements (just like their offline counterparts) are unwelcome at worst and informative at its best. But one struggles to see how they can stretch to improve the experience per se. The inflation of the experience as well as the constant use of the phrase 'protection of users` privacy' on the Phorm website, is a clear design by the company to hide the true nature of the surveillance taking place here.

Basically, Phorm will have equipment at ISPs which track the activities of the end user. Thus, it will note down the URL visited, search terms used and other relevant information. The IP address of the user is not captured, but a cookie with a unique number is installed on the browser of the end user.

The data collected is categorised and used to create the profile of the user. Hence, when the user visits a webpage whose adverts emanate from OIX, s/he is directed to adverts targeted to his/her profile.

BT is apparently considering starting a trial of the service in the near future. There have also been rumours of 'secret trials' having been conducted without the consent/knowledge of the end user.The Information Commission ruled in May that no action would be taken against BT as it was difficult to explain to users what was being done. However, it also ruled that any future use should only go ahead, with the consent of the users. The flaw in this ruling is quite apparent: surely the inherent difficult in explaining to the end-user what is being done, is still present: so it is very hard to understand how the nature of the difficulty has evolved so that now an explanation is more feasible.

The dangers inherent in this initiative (breach of privacy, breach of data protection etc) are very much apparent and it is very hard to see how the Government will be able to persuasively rationalise them. In addition, it is also very difficult to see the Commission approving of such a scheme. However, in the meantime, this does not put a stop to the launch of the Phorm initiative by the ISPs in the UK, which of course means that the end-user will be incredibly vulnerable until the Commission reaches a decision. A far better option, would have been to ask the ISPs not to launch this initiative until the Commission`s findings.

Disclaimer: This image is subject to copyright. Click here to access original image.