By Darren Waters
Technology editor, BBC News website
The issue of online privacy is a legal and ethical battleground
Two respected privacy campaigners have praised the user protection measures of a controversial online advertising system about to be deployed in the UK.
The tools, developed by US firm Phorm, track users' online surfing habits.
BT, Virgin and Talk Talk have signed up to trial the technology.
Campaigner Simon Davies said: "We were impressed with the effort that had been put into minimising the collection of personal information."
Mr Davies and Gus Hosein were invited by Phorm to assess its privacy protection measures.
The two work with campaign group Privacy International but their work for Phorm was done as part of a new privacy start-up, 80/20 Thinking Ltd.
Phorm has said its tools anonymise the data it collects and that users can opt out via their Internet Service Providers (ISPs) at any stage.
But almost 1,000 people have signed a Downing Street online petition saying the system, called Webwise, breaches customers' privacy.
The Information Commissioner's office has said it has contacted Phorm to find out more information about how the system works.
In a statement, a spokesman for the office said: "We are currently reviewing this information. We are also in contact with the ISPs who are working with Phorm and we are discussing this issue with them."
Mr Davies told BBC News: "Phorm does advance the whole sector of protecting personal information by two to three steps.
"The problem is that may not be good enough for consumers."
He added: "Behavioural advertising is a rather spooky concept for many people."
Phorm works by placing a cookie on a user's machine that contains a randomised identifying number. That cookie tracks websites visited and draws conclusions about a user's behaviour in order to target more relevant adverts.
The ISPs and companies who sign up to the scheme take a cut of advertising revenue.
Phorm has said the data collected is 100% anonymous and no profile of the user is ever created, so that no-one could "reverse engineer" the information in order to establish identity.
The company's website also states that the IP address of a computer, the unique identifying number of a machine online, is not stored, nor are search engine queries.
But the firm does "collect" search terms used, as well as keywords on web pages, which has concerned some web users.
There is also concern that users' web surfing habits are being handed to a third-party company.
Speaking to Radio 4's iPM programme, Phorm chief executive Kent Ertugrul said: "It's a choice. If people think it's not a choice they will feel it is being rammed down their throat and will react very, very badly to it.
"I understand that and I would too [react badly]. The very first you will see when you go online after it has been deployed is a full-page notice and at that point if you are not happy, you can opt out.
"If you find that wasn't enough, in the banner spaces as people are browsing you will see banner ads saying that Webwise is on.
"So if you don't want it, you will be able to click on these ads and switch them off."
On its website, Phorm's chief executive Kent Ertugrul, said Phorm ignored form fields on websites, numbers with more than three digits, e-mail addresses and secure web pages.
Mr Davies said the onus would be on Internet Service Providers to ensure customers had enough information about the scheme in order to have "informed consent".
He said unless ISPs were extremely clear they could run foul of the Regulation of Investigatory Powers Act (RIPA).
"RIPA is pretty clear that the provision for notification for consent, and informed consent, have to be extremely clear," he said.
A spokesman for BT said it was confident that Phorm met all applicable regulations and laws.
Later this month, 10,000 BT customers will be invited to take part in a trial of Phorm.
The BT spokesman said Phorm offered consumers two benefits.
"Customers will receive more relevant advertising and will get warnings if any of the websites they visits are known to be phishing sites."
He said research BT had carried out had shown that customers did want more relevant advertising as a result of their surfing habits being tracked online.
"We have gone to considerable lengths to ensure our customers privacy is guaranteed," he added.
Mr Davies said he remained opposed to services which required users to opt out.
He said: "If firms say this "enhances the user experience", if that is true and users want it, then make it opt in.
"That will also avoid all sorts of legal problems."
The spokesman for BT said the firm had made no decision about whether a wider deployment of Phorm would be opt in or opt out.
There has also been criticism that the ISPs have signed up to work with a company that was accused of pushing spyware while it was trading under the name 121Media.
The company distributed a pop-up advert system called PeopleOnPage which collected broswing habits in order to target adverts.
Mr Ertugrul said: "People were unable to distinguish between spyware and adware.
"We went public as the only adware company. The association between free adware and spyware was so strong... that it threatened our core long-term values.
"We unilaterally shut down all of our revenues on that. Nobody pushed us to do that."