Self-regulation ‘is adequate for UK advertising industry’
Regulation of online advertising remains a key concern for those in the industry, as issues surrounding privacy continue to be raised by commentators, sector insiders and MPs.
Behavioural marketing remains the subject of debate, despite the Internet Advertising Bureau’s (IAB’s) efforts to quell the fears of consumers and politicians with the launch of its Good Practice Principles for the medium.
A recent report by Forrester Research revealed that use of this form of targeted marketing by European advertisers rose from ten per cent in 2007 to 26 per cent in 2008, with analysts attributing the increase to new offerings from Google and other companies.
Last month, the European Commission (EC) launched legal proceedings against the UK government’s support for behavioural targeting technology.
The EC alleged that there had been a breach of data protection laws by internet advertising company Phorm, which sparked anger from privacy campaigners when it emerged that BT tested the technology in 2006 and 2007 without informing customers involved in the trial.
Amazon, Wikipedia, BT and Talk Talk are among the major websites to have opted out of using Phorm’s technology recently after the Open Rights Group urged major internet firms to withdraw from the system.
“Technologies like internet behavioural advertising can be useful for businesses and consumers but they must be used in a way that complies with European Union [EU] rules. These rules are there to protect the privacy of citizens and must be rigorously enforced by all member states,” said EC telecoms commissioner Viviane Reding.
“We have been following the Phorm case for some time and have concluded that there are problems in the way the UK has implemented parts of EU rules on the confidentiality of communications,” she added.
Phorm insisted that its technology was “fully compliant with UK legislation and relevant EU directives” and said that this had been confirmed by the Department for Business Enterprise and Regulatory Reform and regulatory authorities.
The Incorporated Society of British Advertisers (ISBA) called for the EC to drop its legal challenge, insisting that such technology “can and should be addressed by the UK’s successful system of advertising self-regulation”.
“Although we understand there are some concerns over online behavioural targeting, ISBA has confidence in the ability of the UK self-regulatory system and in the IAB’s principles for users of this new technology,” said David Ellison, the organisation’s marketing services manager.
Phorm is one of ten businesses that initially committed themselves to the IAB’s Good Practice Principles, which are based on the three core ideas of notice, user choice and education, aimed at building trust and understanding of the medium and enhancing internet surfers’ ability to control the information about them used by advertisers.
Other firms to have signed up to the self-regulatory system include Google, Microsoft, Platform A and Yahoo.
“The IAB principles have the backing of Ofcom and the UK government and are designed to promote transparency and user choice, as well as to help consumers better understand the benefits of behavioural targeting,” said Mr Ellison.
“Importantly, the technology itself has also been cleared by the Information Commissioner’s Office.
“The UK advertising industry has proven over the years that it can very effectively police itself. We see little need for intervention,” he concluded.
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The essential problem with Phorm is nothing to do with advertising.
Its the illegal interception of private and confidential, personal and commercial, telecommunications.
Obviously self regulation is not good enough, if it was then the issues with Phorm should have been picked up and dealt with before it ever needed the intervention of the EC. This whole episode with Phorm has done so much to damage the reputation of any company involved in behavourial ads, but nobody other than the EC really comes out of this with any credability, especially Ofcom, ICO, The British Government, BT etc.
All I can say is that the ad companies, governments and regulatory bodies seem to have forgotten about one little thing, the consumer, where is our representation, where is our voice and input into this self regulation process? Whilst this kind of regulation may work with other media, such as television, it will not work with the Internet because the ordinary person wields a lot of power as Phorm found to their cost.
If self regulation is to work then they need a representative from the online populace, and not somebody from Government or some fat cat business man, but someone who actually understands the online communities reservations about this form of advertising.
If you were talking over the fence to your neighbour about a shopping trip would you tolerate someone taking notes so they could send you unsolicited mail.
Phorm in a nutshell & my web surfing IS private unless “I and the Website” choose otherwise!
I don’t think the Phorm issue is about the advertising, it’s the fact that it is the internet service provider sneaking up on you and watching what you do to snoop. The ISP is intercepting the private communication of their customers in order to make money out of adverts being displayed to them.
Junk mail throught the door, delivered by the post man is one thing. But if the post man was opening my letters to decide what junk mail to send me… THAT is where I would have a really big problem with it.
The post man delivers mail, that’s their job. It’s not to spy on their contents routinely. The ISP’s role is to be a communication conduit, that’s their job!
By the way… the article says that Phorm insisted its technology was “fully compliant with UK legislation and relevant EU directives” and said that this had been confirmed by the Department for Business Enterprise and Regulatory Reform and regulatory authorities.
This is not quite true (as is often the case with Phorm, truth is distorted regularly). Here’s the truth, judge for yourself how reliable Phorm are when they make statements:
BERR (the Department for Business Enterprise and Regulatory Reform) said this in writing on 17th April 2009:
QUOTE:
BERR has never provided such a statement to Phorm and has never confirmed to the company “that their technology is fully compliant”
END QUOTE.
SOURCE:
http://www.whatdotheyknow.com/request/10390/response/24103/attach/html/3/Reply%20to%20I%20cooper%20foi%2009-0529.pdf.html
Would you consider an update the article to correct the untruth suggested by Phorm?
Steve