The EU is to warn internet companies they will face tougher legislation if they fail to protect information given to them by customers.
Meglena Kuneva, the Consumer Affairs Commissioner, will meet firms like Microsoft and Google to tell them standards of privacy are not satisfactory and that basic consumer rights in terms of transparency, control and risk are being violated.
Internet firms say they have recently taken action to protect users' data.
Consumer watchdogs believe that due to the technology used to profile customers growing to be so sophisticated, more confidential persona information is being recorded than is necessary.
Kuneva will warn internet giants such as Microsoft and Google that "the current situation with regard to privacy profiling and targeting is unsatisfactory".
The European Union has expressed concerns that consumers are being pressured into handing over personal data to subscribe to internet services. It thinks that confidential information is then abused to create a profile to target the customer for sales.
The EU cites as evidence the social networking site, Facebook, which was forced last month to abandon a plan to change its policy towards privacy after a backlash by users.
The EU says regulators need to intervene to protect consumers even though keeping data that tracks customers' preferences is useful for marketing.
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