The so-called 'cookie law' that requires website operators to warn about their use of the tracking software is to be reviewed.
The European Commission will consult with businesses, industry bodies and other stakeholders about possible reforms to the law, which has been widely criticised for being annoying and ineffective.
However, the EC has indicated that it plans to give e-privacy rules sharper teeth, which may mean more onerous rules for companies in Europe.
The review will have three objectives: to assess the need to update the directive, and hence to broaden the scope of EU e-privacy rules; to make e-privacy laws in Europe consistent with the recently passed General Data Protection Regulation; and to improve the security and confidentiality of communications throughout the EU.
It will also cover consent requirements that encompass the cookie warnings in place since 2013.
One area that the EC is keen to consider is extending a beefed-up e-Privacy Directive beyond what it calls "over-the-top providers", typically traditional telecoms companies, to all providers of communications services.
The Directive could therefore be extended to social media networks and messaging services such as Skype and WhatsApp.
This isn't the first time that the EC has looked to reform the Directive, having expressed such an intention in 2014. Law firm Pinsent Masons said that an e-Privacy Framework document published last year suggested changes to rules relating to cookies, direct digital marketing and the processing of location data.
Anna Fielder, trustee and chairwoman at campaign group Privacy International, maintained that the rules need to change to cut down on the level of online surveillance by major internet companies.
"The cookie directive debate was that the directive said companies should give people explicit consent, to be aware of what's going on, and should be able to opt out if they want to," she said.
"It resulted in those annoying things coming down when you search the web saying: ‘We put cookies on your PC and you either agree or not', which serves no purpose.
"What would be great, if possible, is if you could block all those cookies and still get ads, but you just won't get profiled and targeted.
"Google will still make money as a lot of it is based on contextual advertising and ads based on the search terms. I don't see a problem with that. But I see a problem when they follow you around the internet and can build an image of you from it."
The review comes as the European Union struggles to agree a replacement for the Safe Harbour agreement with the US, potentially affecting online businesses in both regions.
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