EU commissioner Reding threatened Britain with sanctions

[Cees Binkhorst]

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Oops, is dus niet Nelie, maar Viviane :)

Groet / Cees

April 15, 2009
Use of Web Tracking Tool Raises Privacy Issue in Britain
By KEVIN J. O’BRIEN

BERLIN — The European Commission threatened Britain with sanctions on
Tuesday for allowing an Internet service provider to use a new advertising
technology to track the Web movements of customers.

The European telecommunications commissioner, Viviane Reding, said that
use of a tracking tool created by Phorm violated European privacy laws.
The country’s largest service provider, BT, acknowledged last April that
it used the tool without customers’ consent in 2006 and 2007, Ms. Reding
said.

“European privacy rules are crystal clear: a person’s information can only
be used with their prior consent,” Ms. Reding said.

The case could become a test for the limits of ads that aim at online
behavior. Supporters of the practice say it has the potential to transform
advertising by allowing marketers to show Internet users only ads that are
considered relevant to them, based on their surfing habits.

But the technique has come under scrutiny because of concern that personal
privacy could be violated as companies seek more specific data on
individual users. In the United States, lawmakers in both houses held
hearings last fall on targeted advertising. Although no legislation came
out of the deliberations, one broadband operator, Charter Communications
of St. Louis, dropped plans to conduct a test of behavioral advertising
technology after receiving protests.

The British government has resisted calls for tighter oversight and has
supported voluntary efforts by industry to monitor how user data is
collected. This month, the Internet Advertising Bureau, a trade
association for Internet marketers in Britain, asked its members to sign a
voluntary code of conduct stating that no Web data would be collected
without a user’s explicit consent.

The initiative was endorsed by Ed Richards, the head of the British
telecommunications regulator, OfCom.

After investigating complaints about BT’s use of Phorm, the British
information commissioner, Richard Thomas, concluded that Phorm’s
technology, which relies on anonymous cookies and tracking of individual
Web movements, had adequately eliminated ties to individual users. BT held
another trial of Phorm’s technology from October through December using
volunteers.

Many companies involved in Internet advertising, including Google and
other social networking services, use behavioral targeting. But because
Phorm receives actual Web-use records from service providers, it says its
technology is more accurate.

An Internet association that has led the protest against Phorm in Britain,
Open Rights Group in London, said the government had ignored European law
to accommodate businesses interested in developing lucrative Internet
advertising models.

“What the U.K. government has done is lackeyed up to business and as a
result we’ve been breaking E.U. law and now have this infraction
proceeding as a result,” the executive director of the Open Rights Group,
Jim Killock, said.

Ms. Reding threatened to take Britain to court if the government did not
step in and enforce European law. A spokeswoman for the Department for
Business, who did not want to be identified, confirmed that the government
had received the notice from Brussels and would respond after analyzing
the issue.

Ms. Reding also called for stronger action by social networking services
to protect the privacy of minors.

Under the action announced Tuesday, the commission is threatening to begin
an “infringement proceeding” against Britain, accusing it of failing to
observe European privacy law.

A spokesman for Phorm, Justin Griffiths, said the company felt it was
being made an example in a broader regulatory struggle between Britain and
the commission.

“Phorm is very confident that it is compliant with the relevant U.K. laws
and E.U. directives,” Mr. Griffiths said.

Simon Davies, the director of Privacy International in London, said the
case against Britain over Phorm was a broader test of the unclear legal
landscape regarding a technique that allows companies to track the
identity and Web habits of individual computers, traced by their unique
Internet Protocol addresses.

“The E.U. has been attempting to require the U.K. government to produce a
definitive statement on behavioral advertising for more than a year,” Mr.
Davies said. “But the U.K. government has refused to do that and now we
have a total breakdown of regulatory oversight and the result is
intransigence on the part of Britain.”

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