Transfer Pricing Associates

New Cookie Law Causes Web Confusion

post Wednesday February 8, 2012

Tags: cookies, eu, internet, laws, regulations, websites


Anyone surfing the Internet is subjected to the endless streams of targeted information in cookies.  There are many different kinds of cookies, some that last only for the duration of the session and others that are for the user’s sessions for a set period of time, a year, 6 months, etc. Businesses and websites use cookies to track and measure site usage as well as understand trends across the marketplace and customer base.

In 2003 the EU declared that anyone using cookies must provide clear information about use as well as the benefit they have received. In 2011 these regulations were dramatically adjusted. Any website using and depositing cookies must provide information about them but also are required to get consent from the end users to store cookies. The only exception to this ruling is where cookies are required for website use, like in online shopping.

Most websites do not have a pop-up or approval process to deposit cookies and thus are operating outside the current legal boundary. Cookie information can usually be found buried in the privacy policy of most websites, somewhere near the bottom of the page in tiny print. As soon as websites do however, we will likely see that the amount of deposited cookies significantly decreases when users are offered a binary choice and the chance to say ‘No’.

If this law started being enforced, we will see a massive shift in business transactions online and how advertising can target and measure use. While this is an EU law, US companies must still comply as it requires businesses to cater to the user as the Internet transaction is measured by user location not company or server location.

While now businesses have been targeted to date, the EU will eventually target some company or another to make the point and enforce the law. The British government has a year-long lead in arrangement to allow their businesses and websites to set up the proper provisions to follow the law.

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