The practice represents a significant expansion in the ability to track a household’s Web use because it taps into Internet connections, and critics liken it to a phone company listening in on conversations. But the companies involved say customers’ privacy is protected because no personally identifying details are released.
The extent of the practice is difficult to gauge because some service providers involved have declined to discuss their practices. Many Web surfers, moreover, probably have little idea they are being monitored.
But at least 100,000 U.S. customers are tracked this way, and service providers have been testing it with as many as 10 percent of U.S. customers, according to tech companies involved in the data collection.
Although common tracking systems, known as cookies, have counted a consumer’s visits to a network of sites, the new monitoring, known as “deep-packet inspection,” enables a far wider view — every Web page visited, every e-mail sent and every search entered. Every bit of data is divided into packets — like electronic envelopes — that the system can access and analyze for content.
“You don’t want the phone company tapping your phone calls, and in the same way you don’t want your ISP tapping your Web traffic,” said Ari Schwartz of the Center for Democracy and Technology, an advocacy group. “There’s a fear here that a user’s ISP is going to betray them and turn their information over to a third party.”
In fact, newly proposed Federal Trade Commission guidelines for behavioral advertising have been outpaced by the technology and do not address the practice directly. [...]
[...] Advocates of deep-packet inspection see it as a boon for all involved. Advertisers can better target their pitches. Consumers will see more relevant ads. Service providers who hand over consumer data can share in advertising revenues. And Web sites can make more money from online advertising, a $20 billion industry that is growing rapidly.
With the service provider involved in collecting consumer data, “there is access to a broader spectrum of the Web traffic — it’s significantly more valuable,” said Derek Maxson, chief technology officer of Front Porch, a company that collects such data from millions of users in Asia and is working with a number of U.S. service providers.
[...] For all its promise, however, the service providers exploring and testing such services have largely kept quiet — “for fear of customer revolt,” according to one executive involved.