BT ditches customer profiling firm Phorm

Natalie Apostolou
07 Jul 2009

BT has discarded Phorm, the software firm behind its controversial web monitoring and customer profiling program.

Phorm\'s platform has been under the critical scrutiny of privacy watchdogs since trials began in 2006, with the European Commission expressing concern that BT\'s broadband customers were not informed of the extent of the software\'s behavioral targeting capabilities.

The proposed roll-out of Phorm\'s Webwise platform had been regarded as a test case for its technology.

The carrier issued a statement yesterday announcing the end of the relationship with the listed software company. "We continue to believe the interest-based advertising category offers major benefits for consumers and publishers alike.

"However, given our public commitment to developing next generation broadband and television services in the UK, we have decided to weigh up the balance of resources devoted to other opportunities," it said.

BT added, "given these resource commitments, we don\'t have immediate plans to deploy Webwise today. However, the interest based advertising market is extremely dynamic and we intend to monitor Phorm\'s progress with other ISPs and with Webwise Discover before finalizing our plans."

Virgin Media, which was closely monitoring the situation and assessing its own behavioral targeting advertising strategy and has signed an MOU with Phorm, issued a statement in response to BT\'s decision confirming an ongoing interest in the platform but taking a more balanced view of privacy issues.

"Given the fast moving nature of the sector, Virgin Media intends to extend its review of potential opportunities with suppliers, including Phorm, prior to making any commitment to launch any of these technologies. We recognize some consumers have significant concerns about the potential implications of interest-based advertising for their privacy," Virgin Media said.

Phorm responded claiming, "Phorm\'s activities remain ongoing and we look forward to creating the conditions necessary for UK ISPs to move to deployment. In parallel, we continue to focus considerable effort on faster moving overseas opportunities. In so doing we have already minimized our dependency on the deployment by any single ISP or in any particular market."

Phorm signed its largest international deal in March with KT Telecom rolling out the platform to an estimated at 100,000 to 150,000 households.

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