A new law comes into force this weekend requiring all websites to ask permission from users before using 'cookies' - data files that remember computer logins, email addresses and previous internet activity.
The new rules, contained in an EU directive, mean UK websites must be upfront with visitors about the tracking tools they use, including providing sufficient information for users to say whether or not they consent to their cookies.
The Information Commissioner's Office ( ICO ), the body responsible for regulating the new law, said the changes would address consumer concerns over privacy.
David Evans, ICO group manager told Sky News: "Whilst lots of cookies are perfectly harmless, in some areas these cookies were being used to do things which might be seen as intrusive.
"It was enabling organisations who you had never heard of to make profiles about your activity, make decisions about you."
The legislation has been in place since May 2011 but companies have been given a year to change their practices ahead of today's change when the law kicks in fully, because of the difficulties involved.
Mr Evans said the ICO, which has powers to fine websites that do not comply, would not be pursuing those "on the road to compliance".
He added: "We will focus our resources on those people who are really not trying to protect their consumers."
But with implementation estimated to cost £10bn, there is concern from the e-commerce sector that this is an unnecessary burden in the midst of a double dip recession .
According to digital marketers Econsultancy, early experience has shown that a site which asks permission to place an analytics-related cookie can suffer a 90% drop in people consenting to cookies.
The tiny cookie text files are also used to identify which sections and articles on a site are the most popular and how users navigate through web pages.
The ICO wants members of the public to report organisations that install cookies on their PC devices without their knowledge via an online complaints form.
But a new survey by Ipsos Mori for online privacy experts Truste has revealed that only a quarter of Brits know that the new law is coming into effect.
Truste recently revealed that the typical British internet user will encounter up to 140 cookies every time they visit a website .