The inquiry focuses on Webwise, a system from the company Phorm, which monitors a person's Web browsing and search terms in order to serve up related advertisements.

An leaked in June showed BT conducted a two-week test involving 18,000 subscribers in September and October 2006 but did not inform those users.

Privacy activists have suggested the trials violated wiretapping laws as well as posing data security and privacy concerns. BT maintains no laws were broken.

A Crown Prosecution Service (CPS) spokesman said Friday the agency is collecting evidence and will later make a determination whether there are grounds for prosecution. A BT spokesman declined to comment on the matter.

BT's secret trials could have potentially violated the U.K.'s Data Protection Act, which mandates that personal data can't be processed without consent. The trials could have also conflicted with the Regulation of Investigatory Powers Act of 2000, which makes it illegal to monitor communication between two entities without proper consent.