The European Commission is planning to stop the way the popular social networking website "eavesdrops" on its users to gather information about their political opinions, sexuality, religious beliefs -- and even their whereabouts, 'The Sunday Telegraph' reported.
Using sophisticated software, Facebook collects information from people's activities on the social networking site -- whatever their individual privacy settings -- and make it available to advertisers, it claimed.
However, following concerns over the privacy implications of the practice, a new European Commission directive, is to be introduced in January, which will ban such advertising unless users specifically allow it, the newspaper said.
Even though most of the information it harvests is stored on computers in the USA, if Facebook fails to comply with the new legislation it may face legal action.
Viviane Reding, the vice-president of European Commission, said the directive would amend current European data protection laws in the light of technological advances and ensure consistency in how offending firms are dealt with across the EU.
"I call on service providers -- especially social media sites -- to be more transparent about how they operate. Users must know what data is collected and further processed (and) for what purposes."
Facebook has, however, denied the claims. A spokesman for the company said: "We do not share people's names with an advertiser without a person's explicit consent and we never sell personal information to third parties."