Police drop Phorm investigation

 

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By Matthew Sparkes

Posted on 26 Sep 2008 at 07:36

The City of London Police says no formal investigation will take place over BT's Phorm trials, following preliminary questioning.

It emerged earlier this month that police were questioning BT regarding its previous trials of the monitoring and advertising system to see if they violated UK law.

The telecoms supplier conducted two secret trials of Webwise, which observes the browsing habits of internet users and collects information which is later used to serve targeted advertising.

Customers and privacy watchdogs groups alike came out in opposition of the trials, but the Information Commissioner's Office ruled earlier this year that it would be taking no further action against either company.

"I was pretty disgusted when I found out about the trial," said BT customer Stephen Mainwaring, speaking to the BBC. "I actually spotted something was going on on my PC but BT said that I must have a virus. I am pretty angry about how I was treated."

Mainwaring has been given compensation for any inconvenience, and suggests that other BT customers from the time of the trials could also have a valid case for a claim.

Despite the controversy, BT has announced that it's planning yet another trial, which was described in June as imminent, but has yet to take place. It is expected to include around 10,000 BT broadband customers.

The news that no police investigation will be forthcoming, coupled with the Department for Business, Enterprise and Regulatory Reform's (BERR) decision last week that Webwise can operate in the UK, means that Phorm is clear to launch commercially.

However, BERR did stipulate that such a system would need to be opt-in - a restriction which may limit the profitability of the project. If customers are asked permission to be tracked and advertised to directly then the user base may well be far smaller than if all BT customers were included by default.

Ofcom announced earlier this week that could help turn the tide of public opinion on behavioural advertising services, as it believes the technology will play an important part in funding the development of high-speed broadband infrastructure in the UK.