Talk about the fox guarding the hen house. Britain’s Home Office is accused of collusion with former spyware vendor Phorm after emails surfaced showing the department seeking Phorm’s approval for the UK’s targeted advertising rules, the BBC reported this morning. That revelation came just one day after The Telegraph wrote about Phorm making personal attacks against privacy advocates who are waging a campaign against the company’s technology.

Phorm is in trials with several ISPs to use its deep-packet inspection technology to sell advertising based on the sites a user visits on the Internet. Its technology is similar to that offered by NebuAd here in the U.S. Phorm is trying to push its technology to North American ISPs as well.

But privacy advocates are enraged by the idea that an ISP can monitor a person’s surfing habits, especially if the consumer is unaware that such technology is being used. The European Commission is taking legal action against Phorm for invasion of privacy tied to a Phorm technology trial that BT conducted without obtaining subscribers’ consent.

The EC argues that the Home Office’s scrutiny on the privacy issues were too lax, which is why these emails between the Home Office and Phorm are proving so inflammatory.

The BBC reports that officials in Brittan’s Home Office, which regulates privacy, worked with Phorm to draft the rules that Phorm would eventually have to follow. From the story:

In January 2008 the Home Office thanks Phorm for comments and changes to its draft paper, which show the company making deletions and changes to the document.

The Home Office official wrote to Phorm: “If we agree this, and this becomes our position do you think your clients and their prospective partners will be comforted.”

 

Phorm CEO Kent Ertugrul told the BBC that the company was seeking advice on privacy from the Home Office, and that the courts would decide whether or not any laws had been broken. For what it’s worth, this doesn’t look good for Phorm, but it’s also no different than the variety of scandals we have here in the U.S. with lobbyists writing legislation on behalf of various federal and municipal legislators.