The City of London Police have said there will be no formal investigation of BT over its secret trials of an ad monitoring system.
BT trialled the Phorm system - which monitors web browsing habits in order to better target ads - without the consent of users last summer.
Angry users handed over a dossier of evidence to the police following the telco"s July annual general meeting.
But the police said no criminal offence has been committed.
"They said that there was no criminal intent on behalf of BT and that there was implied consent because the service was going to benefit customers," said Alex Hanff, one of the chief campaigners in the case.
Nicholas Bohm, a lawyer with thinktank Foundation for Information Policy Research, said the police response was "absurd".
"A driver who kills someone when drunk has no criminal intent. It is not a necessary ingredient of a crime," he said.
"As for the idea that consent is implied on the grounds that some people would like a service, that is not good enough at all," he added.