Death of Phorm: Greatly Exaggerated

April 13, 2009

Has the Commission sounded the death knell for Phorm, and incidentally killed off the use of any application along similar lines anywhere in the EU?

I think it may be difficult for Phorm to avoid being seen by its potential clients as more trouble than it is worth. Not only is any ISP adopting the technology going to be the source of targeted opposition, and thus lose a small portion of privacy aware clients, it may find that it gains a reputation for not being too concerned about privacy generally (smoke, fire – I am sure you get the idea). Now, in addition, the adoption of Phorm technology brings with it two separate pieces of baggage arising from the EC action. First, the adopter might get dragged into any proceedings and secondly, the adopter may have to redesign if the technology is declared illegal in its current state by EC decree. The expected {launch of Phorm} might just take a while longer than expected.

So Phorm and behavioural advertising may be caused so much commercial harm that it slides off investment life support and dies. (I have no information about how deep its pockets are, but one assumes that funds are not without limit.). But it will be death by commercial reality – and it may take quite a while; it is by no means death by legal ruling.

For a start, it has to be remembered that the EC is not taking action against Phorm. The infringement proceedings are against the UK and focus on ‘several problems with the UK’s implementation of EU ePrivacy and personal data protection rules’. Viviane Reding even said that ‘technologies like internet behavioural advertising can be useful for businesses and consumers’. If Phorm were a West End musical it would be carefully selecting from her quote and splashing it across the marquee.

It seems that the main problem is that Ms Reding does not like the fact that it is only an offence if interception is ‘intentional’. She also seems to think that the UK police are ill-equipped to supervise this area of behaviour.

While it is hard to disagree with the latter view (I don’t think that the ICO are great fans of police enforcement either), I must say that I don’t like the criminalisation of unintentional acts as a general principle. I don’t want to start sounding like a Daily Mail leader writer (though the money would be nice), but I did bridle just a little at a call from the EU requiring the UK to change its laws to create yet more strict liability offences. That emotion, and just a little resistance to the rather too obvious satisfaction of those who have opposed behavioural advertising technology, {i}almost{/i} made me feel sorry for Phorm – they are after all just technologists trying to make a living rather than the Stasi.

The other observation relevant to Phorm’s supposed demise is that this will all take ‘forever’ – and I am only just resisting the urge to add a ‘literally’. These sorts of proceedings move from the current stage on to a reasoned opinion and on to the ECJ. I won’t be holding my breath.

And finally, though perhaps it is the British EU-paranoia setting in, I fancy that slightly adapted technology in a different jurisdiction (though obviously not France) might get the nod even before the ECJ gets round to giving a ruling.