BT drops Phorm

Shares in Phorm have tumbled after BT Group said it had no "immediate plans" to adopt its targeted advertising technology. BT had been expected to be the first UK broadband provider to launch Phorm's service to its customers after completing a trial of the technology – which matches online advertisements to consumers' interests – earlier this year.

Phorm's technology has come under fire from privacy campaigners since it first announced agreements with BT, Carphone Warehouse and Virgin Media in February 2008. The European Commission has also voiced its concerns about BT's trials of Phorm's technology in 2006 and 2007 without informing customers. But Ofcom and the Information Commissioner's Office have backed Phorm's technology, provided it complies with data protection laws.

BT's roll-out of Phorm had been closely watched in the industry as a test case for its technology, which also requires participation of website publishers to show the advertisements. Carphone and Virgin have not yet announced any trials of Phorm's technology.

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