Amid rising concern about privacy, BT Group, the British telecommunications company, said Monday that it would not adopt a technology that lets advertisers tailor their pitches to consumers based on interests revealed by their Internet use.

The news was the latest in a series of setbacks for Phorm, the company that developed the technology, causing its stock to plunge more than 40 percent.

Phorm’s approach has been hailed by advocates as a way to improve the effectiveness of advertising. But the technology has raised concerns because it mines actual data supplied by Internet service providers, rather than building consumer profiles from partial Web browsing patterns, something that many Web companies already do.

Though Phorm says its system renders the data anonymous and has safeguards against security breaches, privacy advocates claimed vindication in the decision by BT.