What Are Cookies?
The first thing to say is that cookies are not programs and they do not record your bank passwords or personal details. They are simply text files that you can open and read at any time using a text editor such as notepad on the PC or text edit on the Mac. Usually a cookie text file will contrain nothing more than the website name the cookie is from and a unique user ID.
How do cookies work?
If the website has been able to retrieve the cookie then it knows that you have been to the website before and therefore it can tailor the content and the way it is displayed according to your settings in the cookie.
The good thing about cookies…
Cookies are a very simple idea and the text file itself can be used to record any number of settings rather than just an ID. So for example your preference for what you like to see on the website's homepage might be recorded. Or in the case of an ecommerce website the contents of your shopping cart might be stored in the cookie so that if you get distracted you can return to complete yourr purchase later without having to add the items into the basket again.
In fact without cookies a lot of what you do online would be a lot harder and clunkier.
…and the bad
So if cookies are so good why all the new legislation? Well mostly it's to do with privacy and the idea that no-one should be allowed to download something to your computer without your say so.
Even though infomation held in a cookie is benign there are some who do not like the fact that anything can be recorded in a cookie and attributable to you. So the legislation is designed to enable you to be aware of what cookies are and to make everyone aware when websites are using them and in the majority of cases a clear policy must be provided which details what type of information is included and for what purpose. If you don't agree with the policy of a website you are then able to choose not to use the website or to turn off the cookies and use the website sans cookies.
It does make browsing a little harder work and some sites just do not work without the cookies. However, if it really matters to you, then that option is always available.