Tech standards body diluting Web privacy - EU official

By Claire Davenport

BRUSSELS, Oct 10 (Reuters) - Internet standard-setters are watering down a tool that is supposed to help Web users hide their data from companies, the EU's Internet chief, Neelie Kroes, will say on Thursday.

When a Web user 'likes' something on Facebook or reads an online newspaper, a dozen or more companies are squirreling away data on their tastes, habits, gender and age. Data like this is the lifeblood of many internet companies which rely on people's clicks on ads to make money.

In the European Union, privacy-friendly regulators have been trying to put more distance between users and the data-gathering companies.

Neelie Kroes set companies meeting under the banner of a standard-setting body called the World Wide Web Consortium (W3C) a June deadline - which they missed - to develop a better version of Do Not Track, a tool that would prevent the companies from collecting such data.

"I am increasingly concerned about the delay, and about the turn taken by the discussions hosted by the W3C," Kroes will say according to an extract from her speech seen by Reuters.

Up to 50 blue-chip companies from Facebook to Walt Disney Co

have been holding weekly conference calls with a handful of data privacy experts on how users can turn off web targeting without crippling their businesses.

Earlier this month, Jon Leibowitz, the chairman of the U.S. Federal Trade Commission, called the W3C's draft of Do Not Track "a loophole you could drive a virtual truck through."

Most browser manufacturers such as Microsoft and Mozilla have incorporated DNT into their settings but the W3C's new standard would put all companies on a level playing field.

Advertisers have criticised DNT for threatening to cut off web companies' main source of revenue.

Tracking has become increasingly competitive as the technology behind it has become more sophisticated. Sometimes a website can sell ad space to, for example, a luxury hotel, within three seconds of knowing a person with a penchant for spa breaks is on their site.

(Reporting By Claire Davenport; Editing by Tim Dobbyn)