The European Commission has said it is in the process of probing the 2006 BT trials of ad-serving technology by Phorm.
However, the Commission is unlikely to take any action over the trials, information society and media spokesman Martin Selmayr told ZDNet.co.uk on Wednesday, as the UK Information Commissioner's Office has ruled out any punitive measures surrounding the trials.
"We are looking into [the BT and Phorm trials], but a national sovereign state's decision can only be challenged if it commits a serious mistake," said Selmayr. "We're looking into it, but so far there has been no indication of that."
The BT Phorm trials in 2006 served ads based on people's web-browsing habits, without their consent.
While documents have been published online that academics claim show BT and Phorm contravened both the Regulation of Investigatory Powers Act (RIPA) and the Data Protection Act (DPA), the Information Commissioner's Office, which enforces the DPA in the UK, said on Monday that it would not be taking any action against either BT or Phorm.
The Commission on Wednesday said that while it was still looking into the matter, it too was unlikely to take any enforcement action regarding the 2006 trials.
"Sovereign members are sovereign," said Selmayr. "We fully understand there's a lot of interest, but we have to rely on a very efficient organisation [the ICO] to make that decision. We are still looking into the matter."
However, on Wednesday the Commission said it could only take action if the Information Commissioner's Office itself could be shown to have taken a decision which contravened regulations, in deciding not to take action against BT and Phorm.
"It's a complex matter, we understand the political and legal interest," said Selmayr. "There are British authorities assessing the matter, [so] the Commission would have to have a very strong legal reason to intervene. The Commission [could intervene] only if the British authorities had acted illegally, and there's no evidence for that."
Selmayr added that the Commission would be "keeping an eye on important developments" around planned further trials of the technology.
Organisations such as the Foundation for Information Policy Research (FIPR), and academics such as Cambridge University's Richard Clayton, have put forward the claim that BT and Phorm acted illegally in performing the ad serving trials. However, both BT and Phorm have denied any illegality, and said they took extensive legal advice before the trials.
Legal experts said that the furore over the legality of the BT-Phorm trials showed that current data-protection legislation inadequately defines digital identity.
"[Phorm] is a new technology that hovers on the borderlines of how we deal with personal data," Rosemary Jay, data protection lead at Pinsent Masons solicitors, told ZDNet.co.uk. "It shows that concepts of identifiability might need looking at again."
Jay said UK law did not deal with concepts of federated identity, especially when people try to influence you without knowing who you are.
"Technically, over whether the technology breaches the law, the jury's still out," said Jay. "Because [Phorm] uses technology just to look at activity and deliver results based on that activity, it's difficult to say if that's an interception. We need another vocabulary, as the law doesn't address the complexities of the technology."