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Reasons to be fearful?

Not so sweet? Nectar and Yahoo could be analysing your habits online and offline.

News that Yahoo has agreed a new advertising partnership with Nectar, the online loyalty programme for Sainsbury's supermarket and other brands, has once again sparked concern over privacy and the integrity of surfers' personal data.

Britain has been under pressure from the European Commission since last April to amend its laws around so-called behavioural advertising.

The furore surrounds the UK's green light for the controversial behavioural ad targeter Phorm, which monitors surfers' web clicks in order to better target adverts on partners' websites.

In the latest deal, Yahoo and Nectar will draw on the databases of both companies to offer targeted online advertising, bringing together online as well as "offline" data. The idea is to attract reticent bricks-and-mortar-type businesses to advertise on the web, by offering them more targeted ad opportunities and better feedback.

So, should we be worried? That the scheme is an "opt-in", and affects only people who are both Yahoo and Nectar users, should ensure its compliance with privacy laws.

The bigger worry, perhaps, are schemes which require an "opt-out", such as early trials of Phorm's technology. Though strides have been made in this area, you need to fill in a series of forms to be sure you are opted out of certain companies' behavioural advertising schemes.

As well as the privacy concerns, behavioural advertising can lead to disconcerting assumptions. It was noticed last year that users of Amazon.de in Germany who bought a particular aluminium baseball bat were also likely to want leather gloves, a balaclava and a can of pepper spray.

Jason Stamper is NS technology correspondent and editor of Computer Business Review.