The Use of Cookies

The Institute of Practitioners in Advertising (IPA) is this week lobbying e-Minister Douglas Alexander about a new EU privacy directive on the use of "cookies". The IPA contest that the current directive's amendments could potentially cripple what is viewed as an already vulnerable e-commerce industry.

The "Proposed Directive on the processing of personal data and the protection of privacy in electronic sector" is expected to be discussed at the next meeting of the Telecommunications Council in early December. The EU published it on 12th July 2000 in order to replace Directive 97/66/EC. The IPA has suggested that these tabled amendments would force many website operators to make costly modifications to their sites' use of "cookies", as opposed to allowing a public debate to decide their fate.

The detail of the concern is that the proposed directive features an "opt-in" or "opt-out" clause. This requires publishers to have explicit user permission before they can store the electronic data that identifies the source of a computer terminal. (The mechanism that stores this data is known as a "cookie".) An IPA survey of its digital media members reveals that 75% of their total online advertising relies on cookies, as does practically every major website on the net. The tabled amendments would, therefore, severely restrict this area of activity.

The IPA has also voiced the commonly held view that, in overall terms, cookies enhance the web experience. This is due to the fact that users currently do not have to re-register and remember their password every time they log on to a website. They also ensure that any online advertising that is served is kept to acceptable levels.

In e-commerce terms, the IPA has also pointed out that cookies are particularly important for online shoppers. This audience would have to re-enter their delivery address and payment details on every visit without then. The IPA believes that an "opt-in/opt-out" clause would therefore be a massive inconvenience and irritant to users.

On top of these objections, the IPA has been quick to emphasize the huge cost impact for e-commerce sites, which would have to redesign their site architecture. It is possible that many companies might even be forced out of business as a consequence. This, in turn, would reduce choice, quality and competitiveness within the marketplace.

Alan McCulloch, chairman of the IPA's Digital Marketing Group, said "While it's important for consumers' privacy to be protected, this legislation is throwing the baby out with the bath water. The commercial impact of this directive is a potential "death blow" to Internet advertising in the UK, and a multi-million Euro bill for companies using e-commerce in Europe. Everyone working in the new economy will be affected."

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.