The integrity of the internet is under threat if online "snooping" goes unchecked, one of the web's most respected figures has told Parliament.
Sir Tim Berners-Lee, inventor of the World Wide Web, said browsing habits could now be monitored as if someone had put a "TV camera in one's room".
Laws must be better enforced to ensure such "sensitive" data was not misused for commercial gain, he added.
Tory MP David Davis said privacy must be upheld without "crippling" the web.
Sir Tim's warning came at a meeting of MPs, peers and technology professionals, organised by the All Parliamentary Group on Communications, to address online privacy concerns.
Parliamentarians are worried about technology allowing firms to track which websites people visit and to share the information with companies for the purpose of sending what is known as "behavioural advertising".
Google has become the latest firm to launch a system to send advertisements to web users based on their online activities.
Privacy campaigners have said the trend is dangerous and warned a new code of practice governing how consent is given is insufficient.
Sir Tim, now a professor at the Massachusetts Institute of Technology, said people revealed "very sensitive" details through their web use and their privacy should be not be infringed
"We must not snoop on the internet," he said.
"What is at stake is the integrity of the internet as a communications medium."
The meeting, chaired by Lib Dem home affairs spokesman Baroness Miller, heard concerns from MPs and peers that existing laws on the interception of communications were either not being enforced or were ill-equipped to deal with the fast-moving online marketplace.
Lib Dem MP Susan Kramer said people were "really quite frightened at the ability to lose privacy through mechanisms we don't understand".
Mr Davis - a former shadow home secretary - said a solution was needed which was "protective of privacy but not crippling of the usefulness of the internet".
He said "simple encryption" of web information could make a difference, a move that web experts have said would be hugely expensive and significantly reduce internet speeds.
It emerged in 2007 that BT had trialled certain "behavioural targeting" technology - to be used directly by internet service providers (ISPs) - without the agreement of its customers.
The practice led to complaints and resulted in a police investigation - which concluded no offence had been committed.
Since then, BT has continued with further trials.
The Home Office has said it is happy such technology conformed to EU data laws although Brussels is still considering whether to take any further action.
Phorm, which is working with BT on the service, said it had made strenuous efforts to inform web users about their rights.
Advertisers could not find out people's identity because all information gathered was anonymous and could not be traced back to individuals, said chief executive Kent Ertugrul.
He said the purpose of its service had been "misrepresented".
"We recognise the need for privacy," he told Wednesday's meeting. "We believe in it absolutely."
Crossbench peer Lord Erroll said behavioural advertising could make many people's lives easier and therefore should not be "rubbished" out of hand.
Campaigners insist such advertising should operate on an "opt-in" rather than an opt-out basis, a stance backed by the Information Commissioner last year.
This would mean that people only receive certain adverts if they have consciously signed up for them.
Richard Clayton, from the Foundation for Information Policy Research, said companies which breached such rules should be "made an example of".