Another Day Another Phorm Scandal!
As if the scandal surrounding the Phorm technology was not bad enough we have heard today that BT actually conducted yet another trial back in 2006 without the knowledge of those involved. It has been revealed that up to 18,000 surfers had their browsing activities collected and used to profile adverts at their specific interests. While BT will not provide further details about the trial, this is yet another situation where surfer habits have been used, possibly illegally, to sell adverts and advertising space. So what next?
The Phorm system basically allows companies to collect details of the surfing habits of those who visit their sites and then use this to target advertising specifically at those who might visit certain pages. Phorm is basically a next generation Web 2 advertising system, but there is currently a legal challenge going through the courts to see whether the system actually abuses the rights of surfers to use the internet in privacy.
This yet again highlights the potential income which online advertising can create and the lengths to which some parties will go in order to maximise this potential. Whether the system is deemed to be illegal or not, it flies in the face of basic business principle in that you do not collate private information about your customers without their knowledge. However, it seems that where the internet is involved there are very few boundaries which cannot be pushed further and further back.
If the ongoing court action goes against the likes of BT and the other companies involved (of whom there are many) goes against them, there is potential for massive compensation claims which could cause real problems for the industry. While in many ways nothing is sacred on the internet, this may just be one step too far and has the potential to blow a major hole in the ship that is the online advertising sector.
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