Are IP addresses personal?

Germany's data protection commissioner, Peter Scharr, leads the EU group preparing a report on how well the privacy policies of Internet search engines operated by Google Inc., Yahoo Inc., Microsoft Corp. and others comply with EU privacy law. He told a European Parliament hearing on online data protection that when someone is identified by an IP, or Internet protocol, address "then it has to be regarded as personal data."

The big search engines see this probably different, but I understand that privacy is still a big issue. Probably the future will show how this stuff will effect the web analytics industry.