Stupid EU cookie law will hand the advantage to the US, kill our startups stone dead

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As if European startups weren’t already at a notional disadvantage in addressing smaller markets, having access to less venture capital and being geographically spread out, a new EU-wide law proposes to hobble its innovation companies by slapping big privacy warning signs all over their sites.

From 25 May, new European laws will dictate that “explicit consent” must be gathered from web users who are being tracked via cookies. That translates into warnings which will put off consumers from EU sites, while US-based startups will be free to continue as they are. How convenient huh.

Although businesses are being urged to work out how they gain ‘consent’ from users, this is bound to cause consternation.

The new European e-Privacy directive is supposedly to protect privacy, although seems to be operating in a bubble. Privacy controls have existed in Web browsers for years. Indeed there are even privacy specific browsers. But consumers have consistently ignored them and carried on happily using cookies, with many people knowing that cookies actually help the browsing experience.

Plus there is massive competition in browsers already, so its not as if consumers need even more protection. Google, Firefox, Apple, Microsoft all are in a massive fight over control of browser share – they listen to customers needs constantly.

So, imagine a world where, after 25 May when the law kicks in, your startup has to explicitly make pop-up windows and dialogue boxes appear asking for a user’s permission to gather their data. If enforced his law will kill off the European startup industry stone dead, handing the entire sector to other markets and companies, and largely those in the US.

Nick Halstead, CEO of Tweetmeme and new startup DataSift told me: “It clearly makes UK companies less competitive because sites we build will need to be plastered with warnings – and our competitors will not. It is a well known fact that at each stage of a signup process you lose customers – if you have to have a big warning sign just for a cookie that will remember you for purely convenience so that it keeps you logged in. The user wont read that detail – they will just think your a privacy nightmare and wont sign up.”

The EU is also ignoring the fact that 100% of web software by default creates a cookie for sessions, with millions of websites built by amateurs producing just this effect. It will be unfeasible to police these.

Presumably if consumers wanted more protection then they would have shifted behaviour and adopted browsers with better controls.