ISP TalkTalk has been reprimanded by the Information Commissioners Office ICO for failing to disclose enough about a malware system it was launching
The ICO said the ISP should have told both it and customers about the trial.
The system is controversial because it collects the urls of websites visited by TalkTalk customers.
In August the ICO received a Freedom of Information request, asking whether it had investigated the system.
It revealed that it had and in correspondence with TalkTalk, Information Commissioner Christopher Graham said: "I am concerned that the trial was undertaken without first informing those affected that it was taking place".
He also revealed that TalkTalk had not told the ICO about the trials.
"In the light of the public reaction to BTs trial of the proposed Webwise service I am disappointed to note that this particular trial was not mentioned to my officials during the latest of our liasion meetings," he added.
BTs Webwise system, devised by ad firm Phorm to track user behaviour in order to serve them more relevant advertisements, proved highly controversial.
TalkTalk defended its trial and the technology.
"We were simply looking at the urls accessed from our network, we werent looking at customer behaviour so we didnt feel we were obliged to inform customers," said Mark Schmid, TalkTalks director of communication.
Protecting customers
Much of the controversy surrounding Webwise centred on the fact that BT conducted widespread trials without telling customers what it was doing.
That led to accusations that it illegally intercepted user data and investigations were launched by The European Commission and UK police.
TalkTalk denied its system had any link with Phorm, despite the fact that it was one of three ISPs which originally signed up to the system.
"It didnt cross our minds that it would be compared to Phorm," said Mr Schmid.
"This is all about protecting customers. It is not designed to provide us with data for any other purpose," he added.
Mr Schmid explained that the system scans websites and would provide customers with a blacklist of sites that contained malware or viruses.
In its tests, some 75,000 websites were found to contain malware.
TalkTalk plans to introduce the system at the end of this year.
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