• by Wendy Davis , Staff Writer @wendyndavis, September 15, 2011

Two years ago, European privacy regulators promulgated a rule that requires companies to obtain users' consent before setting tracking cookies. But whether that consent must be opt-in or can be granted on an opt-out basis still isn't clear.

This week, however, one group of privacy officials in the EU came out strongly in favor of opt-in permission. "Consent is necessary for placing and reading information on end-user terminal equipment such as a cookie," the Article 29 Working Party said in a statement issued on Wednesday. The regulators go on to criticize a self-regulatory proposal of the European Interactive Advertising Bureau Europe. As in the U.S., the self-regulatory program would require companies to notify users about behavioral targeting through an icon and also allow users to opt out. "In most cases the industry legitimizes processing on the basis of inaction or silence of the user. However, as the Working Party already stressed in its recent opinion, only statements or actions, not mere silence or inaction, constitute valid consent," the Article 29 Working Party stated.

The Article 29 group doesn't have the last word, but wields considerable influence.

Coincidentally, the group's report was issued on the eve of a U.S. House of Representatives hearing about whether privacy rules in the EU are placing a "burden" on businesses in America. At the hearing, Rep. Cliff Stearns (R-Fla.) -- who has emerged as one of the biggest critics of behavioral-targeting restrictions -- wondered aloud whether the EU's regulations were actually a "subterfuge" aimed at favoring European companies. Stearns earlier this year introduced a privacy bill that wouldn't impose any new requirements on companies engaged in behavioral targeting.

Regardless of U.S. lawmakers' opinions, officials in Europe are forging ahead with new privacy requirements. While ad networks need not follow the same rules in Europe and in the U.S., it could prove awkward from a public relations standpoint for companies to set cookies differently depending on whether users are in the U.S. or abroad.