European Union: How The Cookie Crumbles

Last Updated: March 19 2012
Article by Melanie Eggers, Christophe Fichet and Leslie J. Milton

In December 2009, European Directive 2009/136/EC (the Directive) entered into force requiring all countries of the European Union (EU) to enact national legislation requiring, amongst other things, that website owners must obtain informed consent for the use of cookies by their website before any cookies are planted on the user's computer hard drive. This means that website owners must now provide users with an upfront way to opt-in for cookies, and must ensure no cookies are used unless the user has provided their consent expressly (strict opt-in) or perhaps impliedly. Previously it was sufficient that users were provided with a facility to opt-out if they sought it out. The deadline for national implementation of the Directive was 25 May 2011, but the period for website compliance expires on 25 May 2012.

The new requirements need to be considered by all website owners, worldwide, to determine what changes (if any) need to be made to their website to avoid coming within the scope of these provisions (eg: ensuring their site functions without cookies, or ensuring their site cannot be construed as targeting the EU) or to comply with the provisions (eg: providing users with a clear, upfront opportunity to consent to the use of cookies, or only using cookies that fall within an exception to the rules).

1. What are Cookies?

Cookies are text files created when a person (the user) accesses a website. The file is stored on the hard drive of the user's computer, in the web browser's directory folder. This file gives that website a 'memory' so that, when the user navigates or returns to the relevant website, the website's server can access the file and retrieve the information stored in it to perform certain functions. The cookie may be necessary for the webpages to display and function properly, or may merely enhance usability of the website for the user, by helping them resume where they left off previously or customising the website with their preferences.

Some cookies (known as "session cookies") are only temporary, storing only information about a user's webpage activities during that browsing session. Session cookies are erased when the user closes their browser and the user will not be recognised by the website if they return. Other cookies (known as "persistent or tracking cookies") remain in the browser's directory folder, storing the user's preferences to be accessed again by the website when the user returns. Persistent cookies have a duration period after which they are deleted by the user's computer or the user can delete them manually at any time.

Although cookies cannot act as viruses, as they are not pieces of code and cannot perform functions (they are merely read), they can act as a form of spyware in recording a user's browsing patterns, preferences and volunteered personal information without their knowledge, which is why anti-virus and security software will routinely flag them for deletion. It is this concern over privacy, and the collection of a user's data without their knowledge, that has prompted reform of the law governing the use of cookies in relation to citizens of the European Union.

2. Why your business needs to take action

The Directive should have been implemented in all countries of the EU by 25 May 2011. Whilst not all EU countries have done so, ultimately the Directive, and therefore the requirement for prior informed consent, will apply in all 27 EU countries. In the UK the relevant laws came into force on 26 May 2011, with the Information Commissioner's Office (ICO) providing a 12 month grace period for website owners to ensure their compliance before it will commence enforcement action. The ICO has stressed that they will not tolerate website owners ignoring the new law or refusing to take action.

Compliance with the provisions of the Directive is therefore required for:

  • any business operating within the EU; or
  • any website that does not define a target market, targets an international audience, or could reasonably be considered to target the EU.

You may believe that your website does not use cookies if it does not perform any of the following functions:

  • have a secure area that users log-in to;
  • have a shopping cart / basket facility; or
  • run ads, widgets or other elements from third party websites.

However, even the simplest websites may be utilising cookies for one or more of the following functions:

  • user's performing searches on the website;
  • tracking which pages a user has visited;
  • collecting general statistical information about the use of the website or the number of viewings of particular items contained on the website (these will be in use by your site if you use Google Analytics or any similar software);
  • remembering user's preferences, such as how many search results per page they would like to view;
  • access to secure or privacy-enhanced areas of the website (those whose domain strings begin with "https"); or
  • in order to comply with the Directive, a cookie recording if a user has consented to the use of cookies on the website or not.

The technical administrator of your website will be able to provide you with details of the cookies your website requires to function, or any other locally stored objects, HTML 5 local storage objects or web beacons which are also covered by the Directive.

3. Current territorial scope of cookies regulation

To date, the implementation of the Directive across the EU has been as follows:

It is also important to consider how the use of cookies is regulated in other major jurisdictions that a website could be considered to target. The law in Canada has been recently revised such that prior express consent to the use of cookies will be required. Specific advice on the position in Canada can be obtained from Fasken Martineau's Canadian offices. In the US, guidance from the Federal Trade Commission (FTC) and some state Attorneys General suggests that use of cookies should be disclosed in a website's privacy policy and use of cookies that collect personal information require the user's consent and the provision of an opt-out mechanism, but again we recommend obtaining advice specific to a website.

4. Action to be taken

At a minimum, all websites using cookies should have a clear description of how cookies are used by that site. Further, if any of the cookies used collects personal information from the user, the website should have a privacy policy.

However, to ensure compliance with the Directive, when a user accesses a website that uses cookies it should contain a clear request for the user's consent to the use of cookies. For websites that already require a user to agree to their terms and conditions before they can access the site, consent to cookies can simply be incorporated into the terms and conditions. For all other websites, a banner or a pop-up containing a tick box is likely to be the best solution, although to date the pop-up option has proved unpopular with the public. A good example of an effective banner is the ICO's:

In some countries, such as France, stricter opt-in provisions may apply, such as specific consent to each cookie and implied consent being unsatisfactory. The use of some cookies, depending upon the particular circumstances, may fall within exceptions to the Directive. In light of the different regimes in operation, the different target users and different cookie requirements of each website, it is best to take specific advice on which solutions are best suited to your business needs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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