U.K. Parliament Members to Probe Behavioral Advertising

The U.K. All-Party Parliamentary Group on Communications (apComm) has launched an investigation into the role of the government with regards to internet traffic, with a specific focus on the area of behaviorally targeted advertising.

“Should the Government be intervening over behavioral advertising services, either to encourage or discourage their deployment; or is this entirely a matter for individual users, ISPs and Web sites?,” the group wrote in a release, outlining its aims for the investigation. It also hopes to establish if there is a need for new initiatives to deal with online privacy more widely.

Earlier this month, the European Commission launched legal action against the U.K. government over its handling of ISP-level behavioral targeting technology trials conducted by Phorm and U.K. ISP BT in 2006 and 2007.

Phorm, however, said in a statement yesterday that it “welcomes” the apComm investigation, and that it “looks forward” to working with the Group “to explain the enormous potential of Phorm’s internet advertising service with its industry leading privacy standards.”

Digital rights organization, the Open Rights Group (ORG), sent a letter to a range of influential online firms and publishers last month, urging them to opt out of having their sites scanned by Phorm’s technology. In response, online retailer Amazon has said it plans to do so, alongside Wikipedia’s parent company, Wikimedia, and LiveJournal.

“By choosing to block the contentious online advertising system from scanning its Web pages, these firms have taken the positive choice to protect their users’ privacy and their own brands,” Jim Killock, ORG’s executive director, wrote on the group’s blog. “We expect more sites to block [Phorm] in the near future and also call on ISPs to drop plans to snoop on Web users,” he added.

Larger online players and portals seem less inclined to do so, however. A Yahoo spokesperson told ClickZ today that the firm had received the ORG letter, and “is currently assessing the privacy implications for users, publishers and ad networks.” AOL is still mulling it over, too, “giving it careful consideration from privacy and business perspectives,” while Google says it currently has “no response.”

A report this week suggested one of Phorm’s existing ISP partners, Virgin Media, has distanced itself from the firm. However both companies maintain the relationship is sound. “The only agreement we have in place is with Phorm. We are investigating the use of Phorm’s technology under our existing agreement with the company but, due to the complexities of the proposition, we do not have any timescales on when, or if, we will progress to trial or launch,” a Virgin spokesperson told ClickZ.

A previous version of this story incorrectly stated the U.K. government would study behavioral advertising. In fact, the investigation has been launched by non-government members of parliament.