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Almost all websites use files called 'cookies' which store information in peoples' web browsers when they visit the site.
There are other technologies that do similar things, and these are also covered by the legislation, but as cookies are the most common technology in use, it has become known as the Cookie Law.
Cookies are used in many different ways on the web, the vast majority of them beneficial to visitors. This includes tracking people across the sites they visit, and using this information to display more targeted advertising. Some people are not comfortable about this happening without their permission.