Phorm, the ad targeting company, is facing a major setback, with several of the world’s largest dotcom companies considering boycotting its controversial online advertising technology. Last month Open Rights Group, the privacy campaign group, sent a letter to nine of the internet’s biggest names – including Google, Bebo, Facebook and Yahoo – asking them to opt out of Phorm’s technology “to protect your users’ privacy”.

Phorm has developed technology that allows internet service providers to track what their users are doing online. ISPs can then sell that information to media companies and advertisers who can use it to place more relevant adverts on websites the user subsequently visits.

Although Phorm emphasises that the information is made anonymous and consumers can opt out, it has been attacked by privacy campaigners as online snooping.

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