Mobile operator and broadband provider Orange will not be using targeted behavioural advertising from Phorm, the ISP-hosted advertising system.
Orange said on Friday that it had decided not to use Phorm's services on the basis that customers may feel the service would compromise privacy.
"As a network provider, we are very close to our customers and, as a result, are trusted with their personal information," said a statement from Orange. "We take this responsibility extremely seriously and it is our policy to be clear and transparent on how this data can be used, without compromising privacy. However, we are open to finding new ways of using data that will provide value to our customers and to advertisers alike."
Despite rejecting Phorm's services on the grounds of privacy, Orange already uses targeted behavioural advertising provided by Revenue Science, and web-analysis and marketing services provided by Hitwise. Both firms provide similar services to Phorm.
Paul-Francois Fournier, vice president for Orange online advertising, told ZDNet UK on Friday that the company uses Revenue Science and Hitwise to analyse traffic on its own website.
"In line with the online industry, we work with behavioural-targeting specialist Revenue Science to study anonymous usage trends on our own portal," said Fournier. "This is not related to our ISP customers in any way, and helps us to serve more relevant advertising to our portal users. Separate to this, like other major UK ISPs and in compliance with the Data Protection Act, we provide anonymous data to a reputable market-research company. This data is not used for the purposes of targeted advertising and we remain committed to respecting the privacy of our customers."
Fournier went on to say that the web-based data model and the telecoms data model are "very different".
"We opted not to use Phorm because it tracks data through the telecoms model, using significantly more access data from the customer," said Fournier. "We are not comfortable with sharing this exhaustive amount of information. We maintain that we have a responsibility, as a network provider, to ensure that non-web-based data is not used without customer consent".
On Friday, Phorm denied that its services compromise customer privacy, and claimed they are better, in terms of privacy, than those of other service providers.
"Our system really set out from the ground up with privacy in mind," a Phorm spokesperson told ZDNet UK. "We store no personal data at all. All we have is whether a random number out there should be served [adverts]. Other systems track people through knowledge of their IP address and [which] sites they are going to. In terms of privacy, we believe our solution is best."
Privacy campaigners such as Alexander Hanff have in the past attacked Phorm over perceived breaches of privacy.
BT conducted trials of Phorm's technology in 2006 and 2007 without obtaining customer consent, which Hanff has repeatedly insisted contravened UK privacy and data-protection laws. The Information Commissioner's Office has ruled out any action against the companies over these trials, as has the UK government. The European Commission is currently scrutinising the UK government's position regarding the Phorm trials.