BT is to start public trials this month of controversial new advertisement-serving technology from AIM-listed Phorm.
Phorm, which serves adverts to people browsing the web, based on the contents of sites they vist, has been criticised by privacy campaigners, including the Foundation for Information Policy Research (FIPR) think tank, which said it believes Phorm's technology breaks the Regulation of Investigatory Powers Act.
Phorm has dismissed the claims, arguing that its technology is designed to protect privacy, Phorm chairman, Kent Ertugrul, said in an interview with Comptuer Weekly. "It is a privacy enhancing tool, not the opposite."
The BT trial will test a system to allow BT internet customers to opt out from receiving advertisements based on their online activity, a BT spokesman said.
This is BT's third trial of the ad-serving technology. The other two were held in 2006 and 2007 and each involved about 18,000 customers who took part in the trails without their knowledge, BT confirmed.
The information commission asked Phorm in early March for evidence that its technology would not breach the Data Protection Act. It has also spoken to BT and Phorm's other customers, Virgin Media and Talk Talk. It has yet to reach a decision, a spokesman said.
BT plans to invite 10,000 customers to volunteer for the latest trial. When they connect to their BT server they will see an "interstial page" that pops up before they connect to their usual home page, offering them the choice of opting in or out of the trial. The aim is to test an "opt-out" cookie that will be placed on the user's browser, BT said.
"We will run the trial for a couple of weeks and see what happens," the spokesman said.
A Talk Talk spokesman said its customers would be opted out by default.
Ertugrul said the Phorm software destroys any link with users' information, such as their IP address, immediately, thus preserving users' privacy and preventing their identity from being stolen.
He said that, unlike Phorm, other ad serving firms such as Google and Yahoo typically record both the IP address and the details of each web site a user visits.
How Phorm works
A user who opts in to the BT trial will be given a cookie with a random number by the Phorm server. This associates itself with keywords on the websites that the user visits. Phorm collects the number's keywords. When the cookie with the random number visits a site that contains keywords that marketers have bought from Phorm, a match is made and the Phorm server delivers the marketer's ad to the browser.