Cookies are files placed in a user's browser to track online activity across numerous websites. Cookies facilitate the sites you visit to remember the items in your shopping cart, recognize your computer when you return to a Web Site and then tailor your online experience accordingly. Cookies remember things such as the cities when you want the weather forecast, your stock portfolio and what advertisings have you clicked on previously.
The directive is not a law, does not ban cookies and does not apply to cookies during log-ins or cookies issued as part of a shopping cart. Yahoo has anticipated the new European Union directive by introducing a feature designed to ensure Web user’s privacy through the use of an opt-out button for cookies.
Yahoo's plan may or may not meet the legal requirements. The plan allows users to click an "AdChoices" button visible in the upper right-hand corner of ads. This will provide users with information about Yahoo's advertising business and the chance to opt out of cookies. Yahoo opt-out answer is a much more practical solution than requiring users to opt in or out of cookies for every single advertisement.
Yahoo explained that this plan is being rolled out across Europe due to the success of a similar initiative that has proved popular with the United States online advertising industry targeting the European Union countries. A Yahoo spokeperson said in a PC World interview that "It is more about letting users manage their cookies. They can also opt-in to the categories that they are interested in".
In the Unites States, the opt-out is already in place and efforts are being made to expand to a "Do Not Track" system. On March 16, 2011, U.S. Federal Trade Commission representatives testified before the Senate Commerce Committee on Privacy, that "efforts to implement the "Do Not Track" system are already underway". The “Do Not Track" choice is not new to the United States, as there are a number of such services available, including extensions for both Google’s Chrome browser and Mozilla’s Firefox. Both allow users to permanently stop advertisers from monitoring their browsing data.