The loss of the tool could have a negative impact on trading and marketing for many SMEs in the media industry because ‘cookies’ – defined as a piece of data sent and stored locally on a user’s computer – allow companies to collect information about the activities of their users on the internet.

Website operators use them to track the “reach and frequency” of online advertising, which means that they can accurately tell how many users have seen a particular advert.

Cookies can also be used to authenticate a user’s identity and speed up transactions. In addition, this can protect users by ensuring their details and passwords cannot be used by someone else.

Some sites even use cookies to track what items a user has put in their online “shopping basket”. Without them, a transaction-based website may not function properly.

The proposed EU legislation, which forms part of the Data Protection Act, would involve media companies (and other SMEs) informing users of the presence of cookies that automatically record information about them, and requesting “explicit, prior consent” for the cookie to be used.

The Interactive Advertising Bureau, which is lobbying against the legislation and has already launched a “Save Our Cookies” campaign, predicts that if it is implemented, users will be “bombarded with intrusive consent messages,” thus creating a “disincentive” for using the net.

The Institute of Practitioners in Advertising estimates that the advertising industry as a whole – worth around £250 million in 2001 – could lose £187 million if the use of cookies is restricted.

Advertising and media companies who wish to glean more information on the “Save Our Cookies” campaign can log onto the Interactive Advertising Bureau website at www.iabuk.net. To find out more about how to use cookies, visit How the cookies crumble – a breakdown of cookie law from Information Age magazine.

With thanks to Lloyds TSB Success4Business.

UPDATE 2018: ePrivacy: the realities of the ‘cookie law’ and de-personalisation