EC expects legal issues around Phorm to be resolved

The European Commission has said it is looking for a 'positive conclusion' to discussions with the UK government over Phorm's ad-serving technology
Written by Tom Espiner, Contributor

Legal questions around Phorm are set to be answered, and the ad-serving technology will move to the next stage, European commissioner Viviane Reding has told ZDNet UK.

Phorm's technology monitors the web-surfing behaviour of users in order to serve them context-specific adverts. Last year, the European Commission began an investigation into whether secret trials by BT of the technology contravened EU data-protection laws. The UK government had already ruled out any investigation of its own into the legality of the trials. The European Commission, as part of its own probe, has asked the UK government for information about that decision.

Information society and media commissioner Viviane Reding told ZDNet UK in Brussels on Thursday that she had discussed the trials of the technology with UK communications minister Lord Carter.

"I spoke about [the technology] with Lord Carter [and] I suppose we are going to bring that to a positive conclusion," she said. "The solution is going to be applied according to European law, with protection of privacy and opt-in. When the trial phase is over and the definite phase begins, the legal problems will be solved."

Reding declined to give further details of how the legal issues would be resolved, and would also not answer questions about the nature of the trials performed by BT in 2006 and 2007.

Privacy campaigners and parliamentarians have claimed these initial trials were illegal, as customers were not asked for consent before their traffic was intercepted.

Both Phorm and BT have said that Phorm's technology is legal, while BT took legal advice before trialling the technology, which it has branded 'Webwise'.

Cambridge University security expert Richard Clayton, who has undertaken a detailed technical analysis of Phorm's technology, said that while users could opt in, and certain websites could also opt in to serve the adverts, user traffic to all websites would be monitored through Phorm's technology. Clayton said websites that had not opted to serve adverts would also need to give permission for the service to be legal.

Clayton also told ZDNet UK on Thursday that he found it hard to believe Phorm's services were legal under European interception law. He said that to be compliant with the e-Privacy Directive, all parties, including all websites in Europe, would have to give permission for data transmissions to be intercepted.

"Wiretapping becomes lawful only if both ends give permission," said Clayton. "It's not a quirk of UK law — it's in the e-Privacy Directive."

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