European Commission leads calls for single privacy law to tackle PRISM intrusion

New EU-wide data protection laws are needed to restore trust in the digital economy, according to the vice president of the European Commission and EU commissioner for justice, Viviane Reding.

In a speech to delegates at the European Data Protection Conference in Brussels, Reding said Europe's economy could be damaged unless a single data protection law is adopted across the continent.

"Trust in the data-driven economy, already in need of a boost, has been damaged. This is a source of concern because of the potential impact on growth. Collected, analysed and moved, personal data has acquired enormous economic significance. According to the Boston Consulting Group, the value of EU citizens' data was 315bn in 2011. It has the potential to grow to nearly 1tn annually in 2020," she said.

The recent spying revelations have also taken their toll and resulted in user trust being lost, she explained.

"[That's] particularly damaging for the digital economy because they involve companies whose services we all use on a daily basis," she said.

However, Reding said, even before the NSA revelations, trust had begun to falter.

"The data protection reform proposed by the Commission in January 2012 provides a response to both these issues: to Europeans' concerns about PRISM as well as the underlying lack of trust," she said.

She went on to cite recent research by the Information Technology and Innovation Foundation (ITIF) over the damage caused to the US cloud industry as further proof of her claim.

"This provides an opportunity for cloud providers who are able to deliver a higher standard of safety and security for data. Data protection will be the selling point: a competitive advantage," she said.

Reding added that European governments need to change their approach to data protection by making foreign companies apply EU data protection laws in full, setting conditions in which data can be transferred out of the EU, enforcing sanctions on companies that don't comply with EU law and clear rules on "the obligations and liabilities of cloud providers who are processors of data."

These reforms would "establish a modern, balanced and flexible set of data protection rules. A set of rules that will create a dynamic market within the European Union and a basis for international cooperation," she concluded.