The company behind the tracking service, Renew London, had fitted devices into 12 bins to collect footfall data by tracking signals from nearby phones.
The bins, which are located in the City of London, record a unique identification number, known as a MAC address, for any nearby devices which have Wi-Fi turned on.
The idea is that advertisers can then send out targeted messages to people the bins recognize.
Renew had installed 100 recycling bins with digital screens around London ahead of the 2012 Olympics. Advertisers buy space on the internet-connected bins, and the city gets 5% of the airtime to display public information. More recently, though, Renew added gadgets that track smartphones to a dozen of the bins.
After the details emerged in the online magazine Quartz, privacy campaign group Big Brother Watch raised concerns to the City of London Corporation, which has now asked Renew to halt the use of smartphone tracking bins.
The collection of anonymous data is a ‘grey area’ in UK law, although the UK and the EU has strict rules on websites using cookies to track browsers' habits. Some see tracking people’s smartphones as a step too far, leading to questions about whether or not people’s privacy have been invaded.
Renew’s chief executive Kaveh Memari said the company had ‘stopped all trials in the meantime’ but told the BBC that the devices had only recorded ‘extremely limited, encrypted, aggregated and anonymised data’ and that the bins were just ‘glorified people-counters in the street.’