Its designers claim the system can anticipate anti-social behaviour and violence by analysing the information picked up its sensors.
The devices are designed to distinguish between distress calls, threatening behaviour and general shouting.
The system, produced by Sound Intelligence, is being used in Dutch prisons, city centres and Amsterdam's Central Rail Station.
Coventry City Council is funding a pilot project which has for six months and has installed seven devices in the nightlife area on the High Street.
Dylan Sharpe, from Big Brother Watch, said: "There can be no justification for giving councils or the police the capability to listen in on private conversations.
"There is enormous potential for abuse, or a misheard word, causing unnecessary harm with this sort of intrusive and overbearing surveillance."