More than ten million customers of the UK's three largest ISPs will have their browsing habits sold to a company with roots in the murky world of spyware.
The deal has sparked fears over privacy, but today Phorm, the firm behind the new advertising system, strongly rejected such concerns.
BT, Virgin Media, and Carphone Warehouse have agreed to feed data on their subscribers' web activities to Phorm. Data will be fed into the Open Internet Exchange, Phorm's advertising network, where advertisers will pay to target interest groups. Frequent visits to the BBC's Top Gear site might result in being served up more car ads, for example.
Phorm is run by Kent Ertegrul, a serial entrepreneur whose past ventures include selling joyrides on Russian fighter jets. Previously, his most notable foray online was as the founder of PeopleOnPage, an ad network that operated earlier in the decade and which was blacklisted as spyware by the likes of Symantec and F-Secure.
Security firm F-Secure describes PeopleOnPage's software here.
It says: "The spyware collects a user's browsing habits and system information and sends it back to the ContextPlus servers. Targeted pop-up advertisements are displayed while browsing the web.
"Each installation is given a unique ID, which is sent to the ContextPlus server to request a pop-up advertisement." ContextPlus was the rootkit that PeopleOnPage used to harvest data and hide its presence.
The similarities between this business model and that which will be kicked off by Phorm in the coming months are striking.