[11] The company's proposed advertising system, called Webwise, was a behavioral targeting service (similar to NebuAd) that used deep packet inspection to examine traffic.

Nonetheless, World Wide Web creator Tim Berners-Lee and others spoke out against Phorm for tracking users' browsing habits, and the ISP BT Group was criticised for running secret trials of the service.

The European Commission called on the UK to protect Web users' privacy, and opened an infringement proceeding against the country in regard to ISPs' use of Phorm.

Some groups, including Amazon.com and the Wikimedia Foundation (the non-profit organization that operates collaborative wiki projects), requested an opt-out of their websites from scans by the system.

[20] The Center for Democracy and Technology, a U.S.-based advocacy group, filed a complaint with the U.S. Federal Trade Commission in November 2005 over distribution of what it considered spyware, including ContextPlus.

[2] On 14 April 2016, Phorm's Board of Directors announced to the London Stock Exchange[29] that the company was ceasing to trade and that shareholders were unlikely to recover any of their investments.

[42] Richard Clayton, a Cambridge University security researcher, attended an on-the-record meeting with Phorm, and published his account of how their advertising system is implemented.

The system then sets a unique Phorm tracking identifier (UID) for the user (or collects it if it already exists), and adds a cookie that is forged to appear to come from the requested website.

[38] In 2008, Phorm considered offering an incentive, in addition to the phishing protection it originally planned, as a means to convince end-users to opt into its Webwise system.

The alternate incentives, suggested in a Toluna.com market research survey carried out on behalf of Phorm, included further phishing protection, a donation to charity, a free technical support line, or one pound off opted-in users' monthly broadband subscriptions.

[1][permanent dead link‍] The widget would only deliver link recommendations if the user was signed up for targeted advertising with a Phorm-affiliated ISP, the widget would be invisible to everyone else..[2] At the press launch Phorm spokespersons admitted that at present not a single UK ISP or website has yet signed up to Webwise Discover system,[3] although they emphasised it was part of the current Korea Telecom Webwise trials.

Nicholas Bohm, general counsel at FIPR, said: "The need for both parties to consent to interception in order for it to be lawful is an extremely basic principle within the legislation, and it cannot be lightly ignored or treated as a technicality."

The emails showed that the company edited a draft legal interpretation by the Office, and that an official responded "If we agree this, and this becomes our position do you think your clients and their prospective partners will be comforted".

"[64] However, BERR denied such confirmation when they responded to a Freedom of Information (FOI) request also made that day:[65] An examination of our paper and electronic records has not revealed any such material.

To add further clarification for your information, BERR has never provided such a statement to Phorm and has never confirmed to the company “that their technology is fully compliant”.In January 2012, the EU dropped its case against the UK government.

[69] Ross Anderson, professor of security engineering at Cambridge University, said: "The message has to be this: if you care about your privacy, do not use BT, Virgin or Talk-Talk as your internet provider."

[note 1] The creator of the World Wide Web, Sir Tim Berners-Lee, has criticised the idea of tracking his browsing history saying that "It's mine - you can't have it.

[71] As Director of the World Wide Web Consortium, Berners-Lee also published a set of personal design notes titled "No Snooping", in which he explains his views on commercial use of packet inspection and references Phorm.

Hanff believes the Stopphoulplay website's statements are "completely irrelevant" to his campaign and that they will backfire on Ertugrul, while Williamson laments that Phorm "has now stooped to personal smears".

[77] When originally launched the web page claimed, "The website managers at 10 Downing Street recognised their mistake in allowing a misleading petition to appear on their site, and have since provided assurances to Phorm that they will not permit this to happen again".

[78] A day after the site's launch, BBC correspondent Darren Waters wrote, "This is a battle with no sign of a ceasefire, with both sides [Phorm and anti-Phorm campaigners] settling down to a war of attrition, and with governments, both in the UK and the EU, drawn into the crossfire.

[83] On 4 June 2008, a copy of a 52-page report allegedly from inside BT, titled "PageSense External Technical Validation", was uploaded to WikiLeaks.

On 2 September 2008, while investigating a complaint made by anti-Phorm protestors, the City of London Police met with BT representatives to informally question them about the secret Phorm trials.

[92] On 6 July 2009 BT's former chief press officer, Adam Liversage, described his thoughts using Twitter: "A year of the most intensive, personal-reputation-destroying PR trench warfare all comes to nothing".

[96] It was not until April 2011 the CPS decided not to prosecute as it would not be in the public interest, stating that neither Phorm nor BT had acted in bad faith and any penalty imposed would be nominal.

[98] Advertisers which had initially expressed an interest about Phorm include: Financial Times, The Guardian, Universal McCann, MySpace,[99] iVillage, MGM OMD, Virgin Media[100] and Unanimis.

In response to customer concerns, TalkTalk said that its implementation would have been "opt-in" only (as opposed to BT's "opt-out") and those that don't "opt in" will have their traffic split to avoid contact with a WebWise (Phorm) server.

Phorm announced the beginning of a market trial in South Korea via the London Stock Exchange's Regulatory News Service (RNS) on 30 March 2009.

[118] In their Notice of 2009 Interim Report & Accounts, published on 14 September 2009, Phorm stated they were "Nearing completion of a substantial market trial, launched in May, with KT, the largest ISP in South Korea".

[126] In respect of the proposed partnership with Telemar (now known as Oi) the claim is that iG, a web portal, only has 5% penetration in the market and Phorm did not clear R$400 million "last year".