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The Phorm Factor

Personal privacy looks set to become a prime casualty in the march towards a brave new world of connected existence. Our online interactions and browsing habits are highly desirable data that can be used by online businesses to target advertising, but just how far should they go in getting this data?

Ever since BT and Phorm secretly tracked 18,000 customers in 2006 they, and other ISPs, have come under heavy criticism; and although BT has vigorously defended its actions claiming that ‘it was not illegal‘, the question remains as to whether it was prudent, or even moral, to secretly snoop on the browsing habits of their customers. In order to appreciate the points of view of the affected parties, it may be worth taking a look at some of the pros and cons of this debate:

  1. Online Business Models – On the one hand, online advertising appears to have become the mythical silver bullet or lifesaver for many Internet business models. Whether this works for every disrupted and disenfranchised industry sector, under every circumstance, is questionable.
  2. Consumers – Overall consumers stand to gain a lot from ad supported online business models which tend to deliver online services relatively cheaply, or even free, in many cases. However, these ad-supported businesses also need to deliver better conversion rates / leads / sales per impression hence the allure of consumer data for more targeted advertising.
  3. ISPs – Just like many other online business, ISPs are struggling to stay relevant in a rapidly changing business environment which seems intent on consigning them to the role of a utility service provider. In addition they are also under increasing pressure to take more responsibility for monitoring and helping stop illegal activities online.

It appears therefore that ISPs are really caught between a rock and a hard place with conflicting demands from their subscribers (for good service and discretion); from content providers and advertiser (for good service and access to user information); and from their stakeholders and shareholders (to evolve and maintain a viable business model). However the question remains whether this entitles them to gather information about users viewing/browsing habits without explicit permission?

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Note: This post was previously published on my BCS DRM Blog, where you can find the original post, and reader comments, in the archives.

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