Is Phorm going to be a thorn in customers' privacy?

We reported a couple of weeks ago on the controversial ad technology, called Phorm, that three of UK's largest internet service providers are planning to implement.

Now BT Retail is preparing to test Phorm on 10,000 of its customers by mid-March 2008; the service will be presented as a free service called Webwise which will help internet users against online Fraud and make their 'internet browsing more relevant'.

Phorm customises the adverts that are displayed in a customer browser by comparing it to a profile based on data collected; as BT puts it, there won't be more adverts, just more relevant ones.

Webwise will automatically check your browsing session against a list of known rogue and untrustworthy websites and will display an alert message when you try to access one of them; a nanny-system that is not unlike Google's own advanced alert system.

However controversial Phorm may sound, it is just a Google Adsense system, but closer to home, with ISPs playing a bigger role in collecting information - something that Google will be anxious about - and ISPs will be desperate to get a regular stream of revenues as margins become tighter and competition more cut throat.

Charles Arthur from The Guardian has a layman's guide to how Phorm will work and even points to a website that caters for a growing number of irate customers who don't want to be Phorm guinea pigs.