If you wish to use IP addresses to identify or build a profile on each of your visitors as an individual, even if they are never identified by name, you should assume that the Data Protection Act applies. Only a court can decide for certain whether or not this is a processing of personal data to which the Act applies and there have been no court rulings on this point to date. The safest course is to assume that the Act does apply in these circumstances. A court will be influenced by the Information Commissioner's guidance on this point. Therefore you should make visitors aware of your intentions to use IP addresses at the earliest opportunity.