US outraged at 'onerous' European privacy laws

The news is the latest event in the debate between the two sides of the Atlantic, over privacy regulations, which will play a large part in determining the level of control over data consumers can expect from the net.

The US House of Representatives subcommittee criticised the EU legislation for being too onerous for businesses and potentially damaging for ecommerce.

The chair of the committee, Republican Billy Tauzin, said in a statement that the EU Privacy Directive is an effort to impose the EU's will on the US. He said it raised questions about US sovereignty and said it would be unfairly restrictive for business.

EU laws on data protection, due to come into full effect later this year, will make it a crime to transmit customer data outside of the European Union, because of the less stringent laws that apply elsewhere. While the EU and the US have negotiated a work-around for this - a voluntary scheme dubbed safe harbour - this has so far proved unpopular, signing up only 25 companies.

The EU legislation would make a multinational web company with a UK presence but servers in the US immediately in breach of the law because it would have to transmit customer data. The spectre of this widespread practice being outlawed, and the failure of the Safe Harbour agreement so far, is prompting the US to take privacy more seriously.