Did BT illegally test a new online advertising system on their customers without consent? That’s currently what British prosecutors are trying to determine.

All the fuss stems from a document that was leaked back in June which showed that BT had held a two-week test, which involved 18,000 subscribers back in September and October 2006 without them knowing.

The prosecutors are looking into Webwise, an advertising system from the company Phorm, which is a monitoring service that drops a cookie in order to track an individuals Internet activity.

The cookie contains a simple user ID, which is tied to certain categories such as “laptops” or “cellphones”, using this information Phorm is able to display “relevant” advertisements.

It’s unknown at this time if the secret trials by BT violated the Regulation of Investigatory Powers Act of 2000, which makes it illegal to monitor the communication between two parties without consent.

Even if it’s found that BT did nothing legally wrong, what about ethically?