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BT comes under fire after a report into its trial of controversial web-tracking tool Phorm is leaked on the internet

BT could face customer protests, or even legal action, over its controversial use of ad-serving system Phorm after an internal BT report relating to its trials of the technology was leaked.

The trials, conducted by 121media in 2006, involved dropping cookies on users’ machines via third-party websites and serving advertisements based on their individual browsing history. Tracking users across multiple websites is usually avoided by major web analytics players for fear of privacy infringement.

“BT may need to modify its broadband terms and condition prior to any deployment,” the report said. “The change must permit BT’s broadband network to silently drop cookies on customers’ PCs.”

The report praised the invisibility of the system, observing that “only 15-20 trialists (0.1% of the trial base) identified the presence of the system and had a negative reaction”, but said that future versions of the system would be “100% transparent” (meaning undetectable).

While users can theoretically opt out of having their browsing tracked, the report noted that “the current [opt-out] method is cookie based to preserve the user’s anonymity. This will cause a user to be opted in again if they erase their cookies”. The report suggested that this feature be highlighted during the opt-out process.

The report referred to “a second phase pilot deployment [that] will be undertaken with a larger user base”, and, aware that the system was receiving negative attention, proposed “121media will take action (both technical and in public relations) to avoid any perception that their system is a virus, malware or spyware and to show that in effect it is a positive web development.”

Dr Richard Clayton, senior computer security researcher at the University of Cambridge, told the BBC that the report “clearly shows that BT illegally intercepted their customers’ web traffic and illegally processed their personal data”.

"This isn’t how we expect ISPs to treat their customers’ private communications, and since, not surprisingly, it’s against the law of the land, we must now expect to see a prosecution,” he said.

BT has said it sought legal advice before running the trial, which was “specifically conducted to evaluate the functional and technical performance of the platform. Absolutely no personally identifiable information was processed, stored or disclosed during this trial.”

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