We're a UK based website and having read the new EU Cookie legislation it just sounds completely nuts, from what I understand, it effectively means you have to ask permission just to store user settings, such as their preferred language.
How are others implementing the new rules? Technically you can't even store a cookie to say that the user has opted out of cookies without asking permission to store cookies! So someone who doesn't want any cookies will have to be asked on every page load...
We aren't hosting anything in the EU. Ever.
So ask that on EVERY page - and make sure that the question specifies that it is asking in accordance with the legislation so that they know who to complain to when they get fed up with it asking on every page.
This is a myth, the legislation is targeted at third party tracking (advertising cookies etc), not cookies used to store user preferences, login data, cart sessions etc. Most of this misinformation stems from a poorly written BBC article. This article debunks most of it.
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