DoubleClick faces monster cookie bill

Online advertising company DoubleClick has agreed to pay nearly £300,000 to settle an investigation into its use of personal information about web surfers, intensifying the debate over privacy on the internet.

The agreement brings to an end a 30-month investigation by 10 US states into the company's controversial practice of gathering personal information about web users.

Under the settlement, DoubleClick has also agreed to provide more information about how it tracks consumers' online habits, and to ditch some of the information it has stored on them.

The company will also give web users access to the profiles it has built up on them.

"When an online contractor can invisibly track nearly every online consumer, consumers deserve to know the privacy cost of surfing the web," said a statement from the New York state attorney general, Eliot Spitzer.

DoubleClick is one of a number of online advertising firms that have used so-called "cookies" to build up a marketing profile on them and enable it to sell to them more effectively.

Cookies work by tracking the websites a consumer visits and recording their surfing habits and preferences to build up a profile on them.

But critics claim this is an invasion of web users' privacy and earlier this year Doubleclick agreed to pay up to £1.2m in legal fees to settle class action privacy suits.

The US federal trade commission is also investigating the practice and new EU legislation will force sites to tell consumers why they are using cookies.

Mr Spitzer said DoubleClick was developing a "cookie viewer" for consumers, which would allow them to find out how the advertising company selects which online ad it shows them.

The issue of privacy on the internet resurfaced recently when it emerged that EU governments were considering a plan to store records of personal communications, including all emails and telephone calls, for at least a year.

Under the plan, all telecommunications firms, including mobile phone operators and internet service providers, will have to keep the numbers and addresses of calls and emails sent and received by EU citizens.