The new features will enhance online privacy by giving the user a more interactive way of accepting or rejecting cookies, according to Microsoft product manager for Windows 2000, Neil Laver.
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Current users can set Internet Explorer to accept all cookies, be prompted each time a Web site wants to create a cookie, or chose to reject all cookies. The new version will offer a "delete all cookies" button as well as alerting the user if a third-party cookie is being sent.
Laver said more information will be available to the user. "It will provide a more verbose set of tools for handling cookies," he said.
In theory, a cookie can only be read by the Web site that has created it. "The resolved Web site name is stored in the cookie filename," explained Laver. "However, there have been security holes in Explorer and 'malicious' Web sites have been able to access other sites' cookies, although it is a very complex procedure."
He added that Microsoft advocates the storage of anonymous data in cookies by omitting any personal details relating to the user. The cookie could instead contain a look-up number to allow the site to find customer details stored on a separate database.
The US Federal Trade Commission may soon endorse a privacy agreement, negotiated withthe industry, to protect Web users' details. A clause has been suggested which would ensure individuals were told if a site records their actions. There are no plans for similar legislation in Europe.
If users choose not to accept cookies, it will aggravate the advertising industry, which uses third-party cookies to get detailed profiles of users' habits such as the sites and advertisements they view.
Despite the potential dangers of cookies, IDC's Robert Rosenthalthought the actual threat is overestimated. "Most companies just want to know who you are and what you buy," he said.
"Sites usually work better if you accept cookies. If you switch them off, the browser won't work so well."
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How the cookie crumbles
What are cookies?
Developed originally by Netscape, they are small text files which store information on a visitor's hard drive. Web sites use them to personalise their service for frequent visitors by recognising who they are and delivering specific information.
What's the problem?
Cookies enable companies to build user profiles without their knowledge, such as shopping preferences or even personal details relating to transactions. Hackers can read data stored in these cookies when the host Web site reads the user's cookies.
Microsoft's cookie management will give more control to the user through a "delete all cookies" button and will alert the user when a cookie is received.