EU consumer protection commissioner Meglena Kuneva has issued a "get tough" message over data protection issues.
Speaking in Brussels on Tuesday, she said her hardline comments should be seen as a last chance warning to the industry to clean up its act.
She told an audience there was a "much-needed" debate on the increasing ability to profile consumers and then use their details for commercial purposes.
Research showed that young people - "the most confident of internet users" - use the internet in spite of the fact that they generally do not trust it, she said.
She told the meeting, "Let me be very clear from the start [that] I believe the internet and the new generation of digital communications offer immense possibilities to consumers.
"The regulatory protection we have in Europe is extensive and far-reaching [although] there is a huge task ahead of us in terms of enforcement of the rules."
The Bulgarian official predicted that "behavioural targeting" online "become increasingly pervasive and consumers understandably feel uncomfortable".
"Today, I want to send a very clear message to those involved in all aspects of the digital world - consumer rights must adapt to technology, not be crushed by it," she added.
"The current situation with regard to privacy, profiling and targeting is not satisfactory."
Kuneva added, "It is regulators that bear the ultimate responsibility of ensuring markets work well and develop their greatest potential with the interest of citizens at heart.
"I want to send a warning signal that we cannot afford foot dragging in this area. If we fail to see an adequate response to consumers' concerns on the issue of data collection and profiling, as a regulator, we will not shy away from out duties nor wait for a cataclysm to wake us up."
The commissioner was the keynote speaker at a roundtable debate in Brussels on the issue of online data collection and profiling.
Kuneva later appeared before a conference in parliament on "EU consumer protection policies - market or regulation?" The event, co-hosted by ALDE MEP Silvana Koch- Mehrin, focused on the expansion of consumer protection rules.
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