Cookie Consent Compliance: Why a Cookie Banner Alone Will Not Prevent Website Tracking Liability

Your cookie solution may be working, but your work here is not done.

With all the website tracking demand letters and litigation, it is not enough just to deploy an out-of-the-box cookie solution.

The recent wave of website and app privacy litigation is projected to result in $1.4 billion in settlements in 2026, according to a recent Privado.ai Website & App Privacy Litigation Report.

First and foremost, you need to address the blocking or rejection of trackers through a functioning cookie solution. Reject should mean reject, and trackers should not “sneak through” after the user rejects them. A failure to honor that choice may create exposure under consumer protection laws and, depending on the technology, data flows, consent process, and jurisdiction, may also increase risk under federal or state wiretapping laws.

But that is not the end of the story.

Some common issues that we are seeing:

• Cookies that are not essential are classified as essential. This is not just a wording issue. The result is that some tracking may operate without the consent on which the company expects to rely. The end result is that nonessential tracking may operate without the consent on which you expect to rely, potentially increasing litigation risk under Section 631 of CIPA and other wiretapping laws, depending on the technology, data flows, and jurisdiction. It may also result in storing or accessing information on a user’s device without the consent required by the ePrivacy Directive and applicable national implementing laws, unless an exemption applies. You may also be allowing cookies or other tracking technologies that facilitate a “sale,” “sharing,” or targeted advertising under applicable U.S. state privacy laws to deploy without providing or honoring the required opt-out right. If this is happening because of an error, you should establish a process to audit the module regularly or require your provider to do so. If this is a management decision because consent is reducing measurable traffic, advertising audiences, attribution, or conversion data, you should reassess the strategy with counsel and consider whether other tracking or data-collection methods should be adopted.
• The banner and linked notices do not provide the disclosures required by applicable law. Depending on the jurisdiction and the design of the consent flow, required information may include the categories of data collected, the purposes of collection and use, and whether data is disclosed, sold, or shared with third parties for advertising. Incomplete or misleading disclosures may increase exposure under applicable privacy, wiretapping, and consumer protection laws, including laws enforced by state attorneys general and the FTC.
• The cookie solution interface is inaccurate, listing cookies that are not deploying or failing to list cookies that are deploying. Depending on the specifics, this could present a minor or significant transparency problem under applicable privacy laws or could affect the validity of consent for the trackers. Best practice would be to require your provider, or establish your own process, to scan and refresh the cookie list regularly and frequently. In addition, you need to ensure that your compliance also covers hardcoded tags, server-side disclosures, cookieless tracking, conditional tags, or technologies that appear only during particular user journeys and would not be picked up by all automated scanning tools.
• You have “unclassified cookies.” Your live cookie solution should not have unclassified cookies. Discuss this with your provider and make sure the issue is resolved. This is not just a labeling problem. The New York Attorney General’s Business Guide to Website Privacy Controls has explained, an uncategorized tag may remain active regardless of a visitor’s privacy selection. The Attorney General identified uncategorized tags as the leading cause of broken privacy controls in its investigation and warned that inaccurate or ineffective privacy controls may implicate New York consumer protection laws.
• Your interface includes “dark patterns.” Your interface for accepting or rejecting cookies, or opting out of sale or sharing, should not steer users toward the less privacy-protective option or make that option easier to select. The CPPA’s Honda enforcement action addressed an interface that required one step to accept all cookies but two steps to disable advertising cookies. The Todd Snyder enforcement action addressed a cookie preference interface that disappeared before consumers could opt out. The New York Attorney General’s Website Privacy Controls guidance similarly cautions against designs that mislead or impair consumer choice.
• You do not display the status of the user’s opt-out preference signal. Under the CCPA regulations, a business must display whether it has processed the consumer’s opt-out preference signal, such as Global Privacy Control.

Link to The bottom line The bottom line

Deploying a cookie solution is only the first step. Companies also need to know what their cookie solution does not cover and find a solution for that, as well a regularly test, audit, and update the cookie solution to ensure that it accurately describes, and actually controls, the tracking technologies operating on the website.