Liberal Democrat spokesperson on Home Affairs Baroness Sue Miller was not comforted, to say the least. She told the BBC: "The fact the Home Office asks the very company they are worried is actually falling outside the laws whether the draft interpretation of the law is correct is completely bizarre."
A bit of back and forth
That same day, Phorm started to hit back at the bad press, launching a website called StopPhoulPlay, which aimed to stop myths about the site and take on activists.
"Over the last year, Phorm and its staff have been the subject of a concerted campaign orchestrated by a small but dedicated band of detractors who appear determined to harm our company, irrespective of the facts, and the potential benefits to UK consumers and websites and advertisers," the company said in a statement.
Despite the protests, a parliamentary group formed in April to look into Phorm and other ad tech too although the firm said it looked forward to trying to convince members of the benefits of its system.
While parliament is paying attention, just a month later, the Prime Minister's Office responded to an e-petition asking the government to look into Phorm by saying it wasn't its problem redirecting complaints to the Information Commissioner's Office.
Despite the continuing back and forth controversy, BT and Virgin Media said they were still on board with the service, following reports to the contrary.
But neither the website nor the PMO decision has stopped the critics. Sir Tim Berners Lee said Phorm was like having a TV camera in your living room, while ORG's Jim Killock compared Phorm to industrial espionage.
But the critics weren't having such an easy time, either. Privacy International had a scandal of its own, as a report written by its founder and leader Simon Davies in his day job as a consultant said Phorm was good for privacy despite his lobby group actively protesting it.
Similar waffling was seen at the BBC, which just couldn't make up its mind about whether to block the site, saying the jury was still out on the service.
Different tactics
The constant controversy attached to Phorm has led it to change tactics a bit. At a town hall held in the middle of the spring, Phorm said it may pay people to use its system.
And then last month, Phorm sent out an invitation to journalists for an event, where the firm was launching a consumer product what exactly that entailed was unveiled today. In addition to its advertising system, Phorm will be offering a way to target content at surfers using the same method of network scanning. Of course, as yet no UK ISPs have implemented any of Phorm's tech.
The beginning of the end?
In July, Phorm hit a rough patch. BT, the one and only UK ISP to trial its WebWise system, said it had no plans to implement it any time soon. This was largely taken to mean BT had no plans to ever roll out the system, leading to shares in Phorm sliding over 40 per cent in one day.
Phorm stayed confident, saying it still had an ongoing trial in Korean and was in talks with ISPs around the world.
The day after, Carphone Warehouse said it had always been waiting for BT to roll out Phorm first. Carphone Warehouse's chief executive Charles Dunstone said: "We were only going to do it if BT did it and if the whole industry was doing it. We were not interested enough to do it on our own."
Unsurprisingly, Phorm's many critics took the opportunity to celebrate, calling on other ISPs to follow BT's lead and finish off the firm's chance of success on these shores.
This story was updated 7 July 2009.
