The Phorm story was broken by The Register’s Chris Williams in February 2008. Since then it has been an ongoing story, rarely out of the news. This week’s announcements by BT and TalkTalk rejecting Phorm have seen the share price drop to 200p at the time of writing from a high of 3560p in June 2007.
Here’s a trend graph from the LSE page showing Phorm’s share price
Today the same reporter writes an assessment of how Phorm went down. To those of us who have been involved in this from early on, some of this is already known – we experienced the various behaviours of Phorm and its varied representatives. It is an excellent summary of where things now stand. Here are some snippets from an article that is well worth reading.
Before I go any further, I would like to publicly thank Chris Williams for all the work he has done about this issue, breaking the story, following it up and continuing to follow it up. If we ever meet, I’d like to buy you a drink.
BT’s association with Phorm has hit the company’s reputation hard. This association and the events leading up to that association seem very at odds with BT CEO Ian Livingston’s public declaration of ethics and practices in his The Way We Work page. How a company can claim to
- Work with partners in the creation of successful ventures which have high standards of integrity and business practice
- Use our values and principles in dialogue with other organisations and in considering new and existing relationships
when it is involved with Phorm sounds a bit hypocritical. But as Chris says
We’ve long known privacy was not a factor in BT’s decision-making over Phorm – that’s how the pair ended up in the mess they did.
BT is left to reflect on what its former press chief described as “a year of the most intensive, personal-reputation-destroying PR trench warfare”.
That quote from Adam Liversage is now featured in the rotating quotes at the top right hand corner of this blog. As Frank Carson would say, “It’s a cracker!”
To carry on the Irish comedian theme, as Jimmy Cricket used to say… “And there’s more!”
We’ve heard testimony this week from BT insiders that a good deal of the silence and delays on the Phorm project was a result of engineering problems, not concern for customer privacy. Put simply, the system could not be made to work. Despite Phorm’s claims soon after its launch that it could process and categorise user traffic on the fly, testing in the real world said otherwise, one source revealed. Significant slowdown was measured when the deep packet inspection probes were switched on.
and another belter
As well as technical problems, our sources report continual internal debate over the legal status of the technology, contrary to public statements. Towards the end, we’re told, a great deal of effort was made by BT lawyers to draw up a contract that would insulate it from any liability if website owners or consumers were to mount a legal attack.
Now if a corporation with the resources of BT can’t nail the legality of Webwise (and it’s not really for them to do that – any decent due diligence should have already discovered dodgy legal grounds and said “Something’s not right here”) then that spells trouble. Perhaps the pound signs persuaded BT to proceed with a partnership with Phorm in the hope the legality issue could be resolved. As it stands, Phorm never published any qualified legal opinion supporting Webwise.
The secret testing and denial of that testing by BT did nothing to endear BT or Phorm to the general public. Neither did the various attempts by non technical PR people to spin debate and discussion in places like The Register and Cableforum towards a pro-Phorm base:
First, and probably acting on terrible advice, he sanctioned PR agencies to swarm the web, pasting boilerplate defences of Phorm’s technology anywhere it was mentioned. The price the firm paid for such “social media” expertise is unknown, but one Reg PR acquaintance joked last year that “everyone wants a bit of it!”. As far as we know, Phorm engaged up to five PR agencies at one time.
You can see typical examples of Phorm avoiding the questions and issues in the 2008 Town Hall meeting videos.
By this time a campaign had started in earnest. Before this story broke I had only ever written to my local MP twice. Now I have written to MPs, MEPs, Peers of the Realm and EU Commissioners. This blog was started up mainly to provide another campaigning voice against the use of DPI for advertising purposes. I’m sure the same is true for a number of private citizens. Private citizens Phorm decided to try and slur in a smear campaign worthy of a petulant teenager.
The UK “government” and watchdogs failed to enforce laws correctly so the EU is now taking legal action against the UK “government” to correct that:
Phorm quite reasonably adopted the strategy of distancing itself from the legal action, emphasising the implementation of law was a matter for authorities. But the cosy relationships between Phorm and BT, regulators and government that eventually stirred Brussels, exposed by Freedom of Information requests, mean it is inextricably and damagingly linked to the proceedings. Phorm won’t admit it, but the link on its website to an advertising industry lobby group press release appealing for the action to be dropped does so tacitly.
BT may not care about privacy at the moment. When the EU starts bringing it to book it will have little alternative. Then we will truly see if Ian Livingston is the embodiment of his proclaimed ethics. In a way Phorm and BT have achieved something positive: they have irritated and upset people enough that they have banded together and engaged the political system to campaign against them. BT and Phorm have politicised us.
Despite all the money poured into PR and spin by Phorm, it is the nerds, the geeks, the techies and Mr and Mrs Joe Public who have moved the arguments on and into a position where the EU has felt compelled to act.
Phorm may not be dead in the UK yet but it has been critically wounded. BT, Virgin Media and Talk Talk all deserve slating for being associated with Phorm. At least Talk Talk have done the Walk Walk and disassociated itself from Phorm. BT and Virgin Media have issued statements saying they are still interested in behavioural advertising.
When the EU has finished its case you may still be interested in it. BTA may not go away. But you and other companies looking to “monetise the intelligence” will have to make damned sure you are in compliance with the law.
We will be watching.