A Home Office official has made public the contents of an internal analysis fmor the Home Office dealing with the question of whether Phorm’s model for targeted advertising is legal under interception of communications legislation.

Trend Micro told The Register: “The nature of Phorm’s monitoring of all user web activity is certainly of some concern, and there is a very high chance that Trend Micro would add detection for the tracking cookies as adware in order to protect customers.

“Obviously, as with other adware/spyware Trend Micro would need to constantly monitor things like… how aware users are that they are being tracked and whether the user has the ability to completely opt out of the service.”

But Phorm’s big problem isn’t technical. Phorm’s big problem, articulated most clearly by Charles Arthur (who covers the issue here and has a good 30 minute audio interview with Phorm’s CEO here), is that it’s selling precisely targeted users to advertisers at the same time that it’s assuring those users that they can’t be identified. People feel instinctively that targetting implies identification.