Top internet firms like Facebook, Yahoo and Flickr are able to read personal text messages and photographs sent via smartphones because many mobile phone apps give their developers the right to go through such content.
Many phone users do not know that when they agree to the terms and conditions, they are actually giving developers the right to inspect their personal information, the Daily Mail reported.
In some cases, the apps also get the right to collect whatever images the phone camera happens to be seeing.
Facebook, Yahoo, Flickr and Badoo have all admitted to reading users' text messages through their Android smartphone apps, according to the Sunday Times.
Many other apps -- some of them available for free -- also include in their terms and conditions the rights to access users' personal data.
Daniel Rosenfield, director of a successful app business whose products are downloaded at a rate of 5,000 a day, said the information was requested by advertisers.
"You can sell your app but the revenue you get from selling your apps doesn't touch the revenue you get from giving your apps away for free and just loading them with advertisements," he was quoted as saying.
The report said Twitter has also admitted that it copied lists of email addresses and phone numbers from people who used its smartphone application and stored them on its servers without taking users' permission.
In 2007, late Apple founder Steve Jobs spoke of the dangers of instrusive apps. He warned that many "want to take a lot of your personal data and suck it up".