Amazon Rejects Phorm's Behavioral Advertising - InformationWeek

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4/15/2009
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Amazon Rejects Phorm's Behavioral Advertising

The company's Webwise behavior-tracking service isn't allowed on any of Amazon's Web domains.

Behavioral advertising is getting the cold shoulder in Europe.

Following news Thursday that the European Commission has begun legal proceedings against the United Kingdom for allowing Phorm to deploy behavioral advertising technology that violates European Union privacy rules, Amazon said it would not allow Phorm to use its Webwise behavior-tracking service on any of its Web domains.

"We have contacted Webwise requesting that we opt out for all of our domains," said an Amazon spokesperson in an e-mail.

Asked to supply a reason for the decision, the company's spokesperson did not reply.

The terms "behavioral advertising," "behavioral marketing," and "behavioral targeting" have become so associated with disregard for privacy that Google now refers to such techniques as "interest-based advertising."

Google began testing "interest-based advertising" in March. Advertisers typically defend behavioral advertising as a way to deliver more relevant ads. Not coincidentally, relevant ads command a premium price.

What distinguishes Phorm's behavioral advertising technology, which analyzes Internet users' Web surfing habits to build interest profiles, is that it was tested in the United Kingdom by at least one ISP, BT, without the knowledge or consent those being profiled.

Under U.K. law, it's unlawful to intercept communications unless informed consent has been provided.

On its Web site, Phorm defends its advertising system. "The Phorm technology is legal," the company says. "It complies with all the appropriate U.K. laws -- and we've consulted a range of experts on this from lawyers to the Information Commissioner's Office (ICO) and the Home Office."

In February 2008, BT, TalkTalk, and Virgin Media, the three biggest ISPs in the United Kingdom, signed agreements to conduct pilot tests using Phorm's technology.

Last month, the Open Rights Group, a U.K.-based cyberliberties group, published an open letter to Amazon, AOL, eBay, Facebook, Google, Microsoft, and Yahoo that called on the companies to opt out of Phorm's Webwise as a way to protect the privacy of their users.

Web sites like LiveJournal, Netmums, and mySociety answered that call.

Amazon has become the first major company to do so.


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