Firms given online privacy warning

British firms which use cookies to track how their customers browse a website will be given up to a year to comply with new privacy laws, the information watchdog has said.

The new EU rules, which come into force tomorrow, mean firms which run websites in the UK will need to ask for permission to store and receive information on users' computers in the form of cookies - small files that a website uses to track users' actions online.

But Information Commissioner Christopher Graham said companies will be given up to 12 months to "get their house in order" before the new EU cookie law is enforced.

"I have said all along that the new EU rules on cookies are challenging," Mr Graham said.

"It would obviously ruin some users' browsing experience if they needed to negotiate endless pop ups - and I am not saying that businesses have to go down that road.

"Equally, I have to remember that this law has been brought in to give consumers more choice about what companies know about them. That's why I'm taking a common sense approach that takes both views into account."

The changes to technology needed to give consumers more control over cookies "aren't there yet", he said.

"So we're giving businesses and organisations up to one year to get their house in order.

"This does not let everyone off the hook. Those who choose to do nothing will have their lack of action taken into account when we begin formal enforcement of the rules."

Businesses could face a fine of up to £500,000 if they flout the regulations once they have been phased in.

Communications minister Ed Vaizey added: "We recognise that some website users have real concerns around online privacy, but also recognise that cookies play a key role in the smooth running of the internet.

"This Europe-wide legislation will ultimately help improve the control that individuals have over their personal data and help ensure they can use the internet with confidence.

"But it will take time for workable technical solutions to be developed, evaluated and rolled out, so we have decided that a 'phased in' approach is right."

The Government is confident that it is taking a "sensible, pragmatic and light touch" approach, he said.