Telecoms and services giant BT has become embroiled in a 'spyware' scandal. In 2006 the company secretly profiled the web browsing habits of 18,000 of its broadband customers using technology provided by 121Media, now known as Phorm.

BT ran the pilot without the knowledge or consent of its customers, up to 10,000 of whom might have been profiled concurrently. The aim was to deploy targeted advertising at groups visiting popular portals within areas such as finance and recruitment.

As reported in The Register, which broke the story, the Regulation of Investigatory Powers Act 2000 (RIPA) makes intercepting internet traffic without a warrant or consent an offence. It remains unclear whether the legal definition of an intercept covers the case.

It's a matter of public record that former BT Retail CTO Stratis Scleparis became group CTO at Phorm the following year.

The story comes amid increasing consumer concern about some companies' use of such technologies to track private surfing habits – and increasing government pressure for ISPs to retain surfing data. Social networking behemoth Facebook has also been in the spotlight for the data it gathers about users' wider surfing habits.