No prosecution will be brought against Phorm and BT for breaching privacy laws

Out-Law News | 08 Apr 2011 | 5:12 pm | 1 min. read

The crown prosecution service (CPS) has said there is not enough evidence to bring a case against a software company accused of breaching data protection laws.

Phorm provoked controversy when it trialled a targeted-ad system through internet service provider BT. The trial, which took place in 2006, was conducted without the knowledge or permission of 18,000 BT customers. It monitored web activity to match adverts to users' perceived interests.

The CPS has said that a prosecution would not be in the public interest.

"We obtained expert evidence to enable us to understand how the technology worked, how many people were affected and how they were affected," said Andrew Hadik, the reviewing lawyer for CPS London's complex casework unit. "Those are the key elements of the alleged offending. Even if further evidence were available and collected, we are satisfied that it could not change our assessment."

The CPS said it had identified seven reasons why it was not in the public's interest to pursue a case against Phorm.

Included in the CPS findings was its opinion that neither BT nor Phorm had acted in bad faith by conducting an unannounced trial. Any breach of privacy laws could be reasonably argued was a genuine misunderstanding, the CPS said.

BT and Phorm's cooperation with police was also taken into account, as was the fact that Phorm now requests users' consent to access web activity during trials. This makes any future covert intrusion unlikely, the CPS said.

Data gathered in the trials was anonymous, not processed by people and was destroyed, the CPS said.

A previous investigation by the Information Commissioner's Office (ICO) said that there was no evidence that affected BT customers had been harmed by the trial. This was cited as another reason for not pursuing a prosecution, the CPS said, confirming that it agreed with the ICO.

The CPS said that it believes that any court would only impose a nominal penalty if it found the companies guilty of an offence.