He made the claim during a press briefing attended by V3. Kovacs said security companies have failed to keep pace with the rapid growth in use of smart devices and the subsequent change in web behaviour.
"The fundamental change happened around five years ago and instead of just seeking information on the internet, we began seeking connections with each other," he said.
"We are sharing more of our lives online; our financial data, our friends, our social circles, pictures of our family, pictures of ourselves. This is not just on Facebook but in many different places. So the risk to our data, to our security, to our privacy has never been higher."
AVG chief technology officer Yuval Ben-Itzhak added that the news is troubling as the rapid growth has left many individuals unsure what data they are sharing, leaving them vulnerable to unscrupulous companies and individuals eager to collect the information.
"You sitting with your mobile device's WiFi on are transmitting your IP and all sorts of information. People are starting to collect this information, both in things like retail and government. This is another piece of information technology being used to compromise the user's privacy," he said.
"Say you're shopping at a mall. They want to know how often you've visited the mall, which store you stayed at the longest. They want to know what type of devices people are holding. This is everywhere. If you're walking in the streets of London and you see a recycling bin, it's not because London is becoming green. The recycling bins are being used to collect information."
Kovacs said while some companies have moved to address the issue they are too partisan and require users to lock themselves into one service provider. "There are many different pieces to security, privacy and threat detection that different organisations are providing but they all look different, are administered differently and have a different user interface," he said.
The ex-Mozilla chief went on to reiterate his call for open standards. "Ultimately, as a user, that's not a whole solution unless I'm willing to live my life on one platform. I could live my whole life on Apple, but ultimately most people will be more satisfied living their lives on multiple platforms."
Kovacs added that companies looking to solve the privacy concern will only succeed if they avoid taking an overly draconian, one-size-fits-all approach and should instead work to make it easier for web users to make informed choices about what they share.
"When I talk about privacy I'm not talking for everyone, I'm not saying all third parties are bad. I'm not saying Google is bad, in fact they offer some great services," he said.
"What I am saying is people have to have choice, we have to have transparency about what's happening with our data and then we have to have the tools to allow us to choose how much of our online lives we want to share."
Despite the enormity of the issue, Kovacs said solving the privacy problem is a huge opportunity for businesses.
"Although it took 22 years to connect the first 2.5 billion, the next 2.5 billion people are coming online in just five years. So in roughly half the time it took the first time we're going to double the size of the internet population," he said. "We have created an incredible opportunity but we have an incredible challenge ahead of us."
Getting the people in emerging markets online is a key goal for numerous technology firms. Prior to Kovacs' comments Facebook founder Mark Zuckerberg announced the Internet.org initiative, which is designed to help connect people in poorer regions to the internet.
Businesses' collection of customer data has been a concern for privacy groups for many years. Silent Circle chief executive Mike Janke said businesses must rethink their reliance on cloud-based services, such as Google's Gmail, if they hope to protect their customers' metadata and privacy.
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