This is one of the most ridiculous things I've heard online this year.
The company in question here seem to be implying that Extreme Tracker is illegal because it uses cookies. The resources it links to struggle to imply that use of cookies is tantamount to hacking and invasion of privacy. Quite frankly, these sound to me like the insane ramblings of a demented conspiracy theorist, and not much more.
Almost every single major website uses cookies in some form or another these days. Is eBay running a massive illegal operation because they use cookies? Is Google? Is Microsoft??
In your shoes, I would completely discount these demented accusations, and asked to be removed from their directory page. They say bad publicity is better than no publicity, but in business that's not always so. Better to do your own advertising elsewhere, than have people who may not know any better come across their directory and believe their paranoid lies about your site harboring illegal content.
That's my 2c worth, anyway.