BT failed to get permission from customers leading to calls for prosecution. BT will not be prosecuted for snooping on the web browsing habits of its customers. The Crown Prosecution Service (CPS) has dropped a request bring charges against BT and Phorm - the firm that supplied the monitoring system.
The Webwise software used cookies to track people online and then tailored adverts to the sites they visited.
The CPS explained its decision saying that there was insufficient evidence to proceed with a prosecution.
The web tracking trials were carried out in 2006 and involved more than 16,000 BT customers. When the covert trials became public they led to calls for prosecution because BT and partner Phorm did not get the consent of customers beforehand.
This left them open to prosecution under Section 1 of the Regulation of Investigatory Powers Act which outlaws unlawful interception.
The call to bring both firms to court was led by privacy campaigner Alexander Hanff who took his complaint to the CPS after the police declined to take up the case.
"At present, the available evidence is insufficient to provide a realistic prospect of conviction,"
"We would only take such a decision if we were satisfied that the broad extent of the criminality had been determined and that we could make a fully informed assessment of the public interest," it said.
The CPS said that influences on its decision included the fact that the trials were short and unlikely to be repeated. Additionally, the data gathered was anonymised and later destroyed.
It added that there was no evidence to suggest that anyone who unwittingly took part in the trial suffered any harm or loss.
A spokesman for BT said it had no comment to make on the case.