Mozilla, the maker of Firefox, has unveiled a new add-on for the popular web browser that gives web users an instant view of which companies are 'watching' them as they browse.

The move comes the same week that Google pushed ahead with its controversial new privacy policy, built to provide even more data for Google's $28 billion advertising business – despite concerns that the massive harvesting of private data might be illegal in many countries.

The Collusion add-on will allow users to 'pull back the curtain' on web advertising firms and other third parties that track people's online movements, says Mozilla CEO Gary Kovacs.

Google's business is built on advertising – the company earned $28 billion from its AdWords service in 2010.

Google's new privacy policy allows it to 'streamline' data from Android phones, YouTube, Gmail and web browsing to target its adverts even more precisely towards individual web users.

Mozilla's Firefox is the world's second most popular web browser, a position under threat from Google's own Chrome browser.

The Collusion add-on is an official Mozilla product, and was unveiled at the Technology, Entertainment and Design conference this week by Mozilla CEO Gary Kovacs.

It creates a 'web' showing web users exactly which advertising firms are watching as they browse.

'Collusion is an experimental add-on for Firefox and allows you to see all the third parties that are tracking your movements across the Web,' Mozilla said. 'It will show, in real time, how that data creates a spider-web of interaction between companies and other trackers.'

'Collusion will allow us to pull back the curtain and provide users with more information about the growing role of third parties, how data drives most Web experiences, and ultimately how little control we have over that experience and our loss of data,' said Kovacs.

Mozilla aims to build up a database of the worst offenders – and make the data available to privacy campaigners.

'When we launch the full version of Collusion, it will allow you to opt-in to sharing your anonymous data in a global database of web tracker data,' says the company. 'We’ll combine all that information and make it available to help researchers, journalists, and others analyze and explain how data is tracked on the web.

Google ignored an international outcry to launch its new privacy policy this week – despite concerns the policy may actually be illegal in many territories.

Vivian Reding, the European Commissioner for Justice, Fundamental Rights and Citizenship said, 'Any company which wants to utilise the European market of 500 million citizens – which we've made borderless, a golden opportunity – then the European rules apply.'

'Citizens should have the possibility of buying into more extensive use of their data – but that should be their freedom to choose, not done by a sneaking way of taking the freedom away from the citizens,' said Reding in an interview with The Guardian.

European Union authorities said that the new privacy policy appears to violate European law,in an email to Google CEO Larry Page.

CNIL, the French privacy agency in charge of the investigation, said Google’s explanation of how it will use the data was too vague and difficult to understand ‘even for trained privacy professionals.’

A coalition of 50 consumer groups in Europe and the U.S. also sent a letter to Mr Page in a last ditch attempt to make the search giant rethink saying the controversial new policy is 'unfair and unwise'.

Their condemnation came after concerns from the European Union, Japan and Korea among others that the policy may actually be illegal.

But it came into force at midnight local time yesterday across the world regardless, with Google claiming that 'to pause, would cause confusion'.

Data from 60 of Google's services will be shared between them – meaning Google account users, owners of Android phones and YouTube viewers will be subjected to even more intrusive 'personalised' adverts from now on.

Worried users are trading guides about how to protect sensitive private data such as search histories and the content of emails from Google's new all-encompassing advertising profiles. Mail Online's guide can be found here.

The search giant said in a blog post, 'Our privacy policies have always allowed us to combine information from different products with your account – effectively using your data to provide you with a better service. However, we’ve been restricted in our ability to combine your YouTube and Search histories with other information in your account.'....