Found details were watered down and difficult for ordinary people to read

Google has been forced to change its privacy rules after it was rapped across the knuckles for illegally leaving people in the dark about how their personal details were collected and used.

Britain’s data protection watchdog said the internet search giant was ‘too vague’ about the vast amounts of information being gathered about web users.

The firm has agreed rewrite its policies to make it easier for internet users to find out how their data was hoovered up and stored after pressure from the Information Commissioner’s Office (ICO).

Google has been ordered to rewrite its privacy policy after data protection watchdog ordered it to make its guidelines clearer, after deeming them 'too vague' and 'baffling' for ordinary people

The development comes two years after the ICO ruled the company’s guidelines must be overhauled because they were baffling and did not comply with UK laws.

Google had faced a fine of up to £500,000 or a court order – but now Kent Walker, the firm’s senior vice-president, has signed a formal undertaking that it would begin making the changes by June 30.

Privacy campaigners have raised serious concerns about the way online companies, particularly search engines and social media sites such as Facebook, collect and use data about their customers.

The regulator - along with its continental counterparts - began looking into Google after its controversial privacy policy update in March 2012.

Separate documents on how Google would use data collected from each of its 70 websites, including YouTube and G-Mail, were condensed into a single file.

But the ICO said the details were watered down, and ordinary people would have no idea after reading the file how their personal details, such as email addresses or website viewing history, would be used by Google.

The company, which owns YouTube and G-Mail, has signed a formal undertaking that it would begin making the changes by June 30

Now the company has vowed to provide ‘unambiguous and comprehensive information regarding data processing, including an exhaustive list of the types of data processed by Google and the purposes for which data is processed’.

The watchdog said the new agreement would have an impact not just on Google but also on other companies which gather information online.

Steve Eckersley, the ICO’s head of enforcement, said the undertaking marked a ‘significant step forward’.

He said: ‘Whilst our investigation concluded that this case hasn’t resulted in substantial damage and distress to consumers, it is still important for organisations to properly understand the impact of their actions and the requirement to comply with data protection law.’

Renate Samson, chief executive of privacy campaigners Big Brother Watch, said: ‘As more of our lives are connected online clearly understanding where our data is being used, who can gain access and what level of control we have over our privacy and security is vital. Changing terms and conditions, so they are accessible and easy to understand is a critical part of our ongoing relationship with technology companies.’

A Google spokesman said: ‘We’re pleased that the ICO has decided to close its investigation. We have agreed improvements to our privacy policy and will continue to work constructively with the Commissioner and his team in the future.’

In July 2013, Google provoked fury when it admitted failing to destroy all sensitive information stolen from unsecured home computers by its Street View cars - harvested from millions of unsuspecting UK households