Rise and Phall: Lessons from the Phorm Saga

The saga of Phorm’s Webwise behavioural targeting system, has been fraught with problems: legal challenges, technical disputes, serial campaigning, police action, EU action, smear campaigns and propaganda. Until the spring of 2009 it had looked as though Phorm would succeed, with the UK government firmly behind it, three of the biggest ISP’s planning to use its service, an endorsement of sorts from noted privacy advocates and guarded approval from the Information Commissioner’s Office. Then, however, things began to fall apart, and by the autumn of 2009 Phorm’s business model was in tatters. Why did this happen, and what lessons need to be learned? This chapter looks at the Phorm saga through the lens of Symbiotic Regulation, and suggests that Phorm’s apparent failure has been a result of their failure to understand the complexity of the regulatory matrix. In particular, Phorm underestimated the views of user-groups and digital rights advocates – and the influence and effect those views could have. The saga has many losers – as well as Phorm itself, the UK government and the ISPs all come out the worse for wear. This chapter suggests how much of this could have been avoided.