As the price of Philip Services Corp.'s stock began to slide earlier this year, the knives came out.
Philip, once cheered by analysts and investors alike for the aggressive corporate strategies which drove its share price up to $28 last fall, had become, as early as February, the subject of harsh criticism.
Nowhere were the critics more vicious than in an obscure little corner of cyberspace ostensibly designated as a home for Philip investors to discuss company strategy.
By the middle of April, that corner of cyberspace, hosted by Yahoo! Inc. of Santa Clara, Calif., had become the launching pad for personal attacks on Philip executives, scurrilous rumours about financial and operational mismanagement, and a plethora of taunts and insults among participants.
Philip had experienced criticism before and wasn't shy about aggressively defending itself.
Newspaper reports that cast the company in an unfavourable light prompted a sharply worded letter from Philip CEO Felix Pardo. Former Philip employee Michael Hilson is fighting to get the courts to lift an injunction Philip requested to silence criticisms of the firm that he made in 1995.
But in this corner of cyberspace, Philip's critics could fire away with seeming impunity because the Yahoo! message board that contained the discussion did not require its participants to identify themselves.
Critics hid themselves behind colourful aliases like ScrapGal, Skeptic666 and Wentworth_Guy.
In a matter of weeks -- as Philip's stock drifted under $10, then under $7, and finally under $5 -- some of the posts to the Yahoo! message board, Philip now says, descended into threats and sexual harassment.
From a corporate perspective, Philip was also convinced that at least one of the anonymous critics at the Yahoo site was an employee or former employee.
Confidential information was allegedly appearing on the message board about Philip's finances or operations that no one but company officials were privy to, and it was eerily accurate in predicting events that had not yet happened. The disclosure of that confidential information, Philip claims, was starting to hurt Philip's bottom line.
Finally, on June 4, Philip had had enough.
It filed a lawsuit in Santa Clara, Calif. -- home of Yahoo! Inc.'s corporate head office -- against the anonymous posters for defamation and breach of fiduciary duty. In the suit, it could only name John Does as defendants, but warned that as soon as it learned the identity of the John Does, it would hold the real culprits accountable.
Earlier this week, Philip won the right to peek behind the veil of anonymity. The company used courts in both California and Ontario to force Yahoo! Inc. and several Internet service providers to reveal the identities of those who wrote and posted the offending Internet messages.
Internet service providers Weslink Datalink Corp. of Hamilton, PSINet Inc. of Herndon, Va., America Online Inc. of Dulles, Va., and possibly other ISPs were served court orders to hand over information to Philip that would identify the owners of e-mail Internet addresses associated with the pseudonyms used on Yahoo!.
Weslink complied with the court order Thursday, identifying former Hamilton politician John Gallagher as the holder of an Internet account used to post some of the messages to the Yahoo site.
America Online's and PSINet's lawyers were reviewing the court order and had not yet complied as of late yesterday afternoon.
Yahoo! earlier complied with a subpoena issued by the California Superior Court to provide Philip with details that helped identify the anonymous critics, including Gallagher.
Regardless of what Philip does next -- and company officials have not said what, if any, its next legal move will be -- the situation has the Internet industry re-examining its ideas about cyberspace privacy rights.
"For PSINet, for the subscribers, for the companies involved, this is all uncharted territory", said Nadir Desai, CEO of PSINet's Canadian subsidiary.
"What we want to do is recognize that this becomes part of the wonderful process of understanding and determining how the laws encompass this new technology."
"We need to work that out through our court system and we need to work it out within the confines of the rights we're all guaranteed."
David Jones, a McMaster University computer science professor and president of Electronic Frontier Canada, said that in turning over personal information about users, companies like Yahoo and Weslink are following perfectly rational business strategies.
After all, Jones said, these firms have no legal obligation to protect someone's privacy and their privacy policies state clearly that they will comply with any court orders.
Still, Jones and groups like Electronic Frontier Canada, which advocate for the extension of charter rights into cyberspace, are hoping for more resistance from Internet service providers and online content companies like Desai's.
Jones hopes that if an Internet service provider fights a court order like that issued this week, jurists will be forced to more sharply define the kinds of circumstances under which a company can be forced to divulge personal information.
"Just because you got a court order doesn't mean you have to comply with it. That's one of my concerns", Jones said.
"Courts don't have much experience with these sorts of things."