said by TR :

---

The Anti-Spyware Coalition has launched a review of Phorm, NebuAd, and other behavioral targeting firms that track user data from inside the world's ISPs.

Today, the ASC - a collection of anti-spyware companies, academics, and various consumer advocates - announced a new internal working group to decide how Phorm and the Phormettes will affect the organization's overarching policies on spyware.

These policies serve as guidelines for the leading anti-spyware apps. "We update our documents when a new potential threats and new potentially-unwanted technologies emerge," says Ari Schwartz, the vice president and chief operating officer at the Center for Democracy and Technology, which first organized the ASC. "Some [anti-spyware companies] have said that behavioral advertising is a gray area when it comes to the ASC definitions. And if some people think this a gray area, it's something we need to look at."

Through partnerships with ISPs on both sides of the Atlantic, companies such as Phorm, NebuAd, and Front Porch track search and browsing activity in an effort to target online ads. Phorm and NebuAd serve up ads on their own, while Front Porch licenses its data to third-party ad networks.

In some cases, anti-spyware tools already flag the ad-server cookies laid down by the likes of Phorm and NebuAd - as well as cookies used by Front Porch partners. The big question is how the cookies should be flagged.

"We need to go into detail on how the consent factors work here. Does someone clearly know they're being tracked or not?" Schwartz says. "We must determine what level of risk is tied to these things."

All three of these behavioral ad firms insist the data they collect includes no personally identifiable information. But it's unclear whether users are properly notified before these services are turned on.

NebuAd says that ISP partners are required to "directly notify" users via letter or email, but this hasn't always happened in the past. In some cases, Front Porch notifies users with a conspicuous in-browser message. But in other cases, it does not.

Phorm hasn't officially rolled out its service, but it has agreements with BT, Carphone Warehouse, and Virgin in the UK (though Virgin insists this does not mean it will actually use the service). Carphone has said it will ask for user consent before turning Phorm on, but the others have not. In 2006 and 2007, Phorm conducted trials on BT's network without telling customers diddly.

Other operations that appear to be working on similar services include a Bay Area company called Adzilla; and Project Rialto, a "stealth company" created by Alcatel-Lucent, but these firms have not responded to our interview requests.

---