Phorm Over Function

[Whether Industry Self Regulation, or Proposed Rules akin to the New York Bill are more appropriate]

* DISCLAIMER * Please note, this is a work in progress, and not intended for review (just yet). I'm just experimenting with the editor, and using this to collect links/extracts which might be helpful. I'll remove this notice as soon as it is complete!

Phorm, formerly 121Media, is a technology company based in Moscow which became the subject of much scrutiny upon announcing that it was in talks with three UK ISPs representing 70% of the country's broadband users, to deliver a "Behavioral Targeting"; advertising system to track surfer's habits using "Deep Packet Inspection"; It competes with NebuAd, Front Porch, Adzilla, and Project Rialto. [one line summary of my argument].

How Do Phorm et. al Work?

Targeted advertising is nothing new. Offline advertisers have been focusing campaigns for decades, and their online progeny have long used persistent cookies to track repeat visitors to their sites, geodata from IP headers to approximate their location, and data from search histories, emails, and the content of requested pages to provide contextual adverts.

Cookies, search data, geodata
Deep packet inspection
Be careful to distinguish between 'anonymous' tracking, and tying to personal data
Distinguish behavioral from contextual, demographic, geographic,
Difference between site-based, and network based behavioral tracking
Leaks UID’s to https sites
Distinguishing between 'anonymous', personal, and sensitive data

The Case For Behavioral Advertising

Proponents argue that these behavioral tracking systems provide several benefits to consumers. First, they point out that Phorm's servers provide some protection from fraud and "phishing"; by blocking access to a blacklist of sites known to be harmful. Second, targeted adverts are offered as the quid pro quo required to keep content free, when revenue from more traditional advertising is drying up. Third, it is suggested, users may prefer targeted to random adverts, an analogy being drawn to the referral systems employed by NetFlix and Amazon to recommend DVDs based on past viewing history, and complimentary or substitute products based on the shopping history of customers with similar tastes. Fourth, much of this information is already being retained by ISPs in compliance with legislation like the EU Data Retention Directive, or the Communications Assistance for Law Enforcement Act. Similarly, browser add-ons such as the Yahoo! Toolbar have been aggregating and reporting on browsing history for some time. Finally, we are told that users can opt-out an anytime, by downloading a simple cookie onto their machines, and that at any rate, consumer outrage—as was recently expressed over the Facebook Beacon system—should mitigate against any egregious conduct.

The (Much) Stronger Case Against

The rhetorical equivalent of being told to “look at the monkey” before being jabbed with a needle, these ‘justifications’ are little more than irrelevant distractions.

First, whether or not these platforms incorporate an anti-phishing layer is of no consequence. Not only is this already a standard feature of most modern browsers, Google’s search engine flags these sites with similar warnings. Given the availability of client-based solutions, is it by no means clear that this should be done at the server level. This feeds into a larger complaint about the complete lack of transparency with regard to which sites will appear on these list [controversy over blackballed domains], the lexicon of the so-called ‘sensitive terms’ which will be precluded from profiling, and the lack of details about the ‘anonymizing algorithm’ or ‘profile categories’ which will be used.

Secondly, most consumers are likely to be completely unaware that any of this is happening, even if they blithely agree once to a EULA. Ironically, the proposed opt-out method, accepting a cookie from faireagle.com, means that privacy savvy users who have disabled third party cookies (as everyone should), will not be opted-out, nor will any user who has blacklisted that domain using DNS, Adblock and so forth.

Third, the notion that the threat of consumer outrage is sufficient to prevent future abuse is absurd. Privacy statements change overnight, and failed companies have an unpleasant to tendency to offer their client records free of such encumbrances to the highest bidder. Aggregation of information on this scale just compounds the problem, there is no way notify consumers of an updated policy ex post, and in the absence of reliable data that advertisers will value this information that much more than less invasive contextual advetrs, there must be a huge temptation to expand the uses of this information. [search for cures and your premium goes up]. The ethical integrity of a firm known to rewrite its own wikipedia entry, and conduct secret trials of tens of thousands of unwitting customers, is zero.

Finally, we need to recognize the unique role of ISPs as the gatekeepers of the Internet, one which between application specific bandwidth throttling and a walled garden approach to mobile services, is increasingly questionable. A comparison with

Proposed Solutions

Industry self regulation * Opt-in / Opt-out, and transparency * Differences in approach between Phorm and its competitors
New York Bill * Supported by microsoft, probably as a dig against Google (but potential acquisition of yahoo?)
FTC Proposed Guidelines

Conclusions

[.]

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r7 - 15 May 2008 - 19:43:22 - JulianM

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