Around a quarter of all mobile users in the UK use devices running Android, and around 100m apps were downloaded in January alone.
People typically give apps permission to access other parts of their handset when they download them, but a Channel 4 News report yesterday claimed that many developers are 'handing on' these permissions to advertisers.
MWR Infosecurity, which was commissioned by Channel 4 to investigate the development of 'rogue' apps, found that many popular free services were engaged in the practice.
"We found that a lot of the free applications in the top 50 apps list are using advertising inside the applications and that the permission that you grant to these applications is also granted to the advertiser," said an MWR Infosecurity spokesperson.
"If users knew about this I think they would be concerned about it but at the moment I don't think they are aware of the situation and how widely their information can be used."
The code found by MWR Infosecurity gave advertising networks access to contacts, calendar and location. It allegedly came from a large US ad network called MobClix, although the firm has not yet responded to the report.
Channel 4 took the findings to Viviane Reding, the vice president of the European Commission, who is currently trying to push through EU-wide reforms to data protection policies.
"This really concerns me, and this is against the law because nobody has the right to get your personal data without you agreeing to this," said Reding of the report.
"Maybe you want somebody to get this data and agree and it's fine. You're an adult and you can do whatever you want. But normally you have no idea what others are doing with your data."
She added: "They are spotting you, they are following you, they are getting information about your friends, about your whereabouts, about your preferences.
"That is certainly not what you thought you bought into when you downloaded a free of charge app. That's exactly what we have to change."
Google told Channel 4 News that it offers best practice policies to third-party app makers to follow, but admitted that it does not actively screen applications before they are approved.
Last week, Reding warned that Google is "sneaking" away citizens' privacy with its controversial new privacy policy, and said that the US search giant could potentially be in breach of European law on data protection.
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