EU agrees data protection regulation - despite cloud computing warnings from Amazon, Cisco, IBM and SAP

Ministers sign off on EU Data Protection Regulations - with a year of negotiations to follow on the details

The Council of the European Union has agreed to new EU Data Protection Regulations that will co-ordinate the law across the 28-member-state bloc for the first time. The agreement after three years of sometimes fractious negotiations was reached at a meeting of justice and home affairs ministers in Luxembourg today.

EU officials claim that making pan-EU data protection laws in the form of a regulation, rather than a looser directive, will provide a foundation for the so-called "digital single market" and instigate growth in the EU's somewhat moribund technology and internet industries - an area in which Europe lags behind both America and Asia.

However, far from encouraging growth, technology giants have warned that the new regulations risk strangling Europe's nascent cloud computing industry and driving internet companies into other jurisdictions where the draconian regulations do not apply. SAP, Amazon, IBM and Cisco have all warned that the Data Protection Regulations could have a deleterious effect.

The key bone of contention is that the regulations will enable users to sue companies that process data, which could bring in organisations such as Amazon Web Services every time a client contravenes EU data protection laws.

If the cloud computing warnings prove correct, the UK and Ireland will be particularly affected. Indeed, Ireland plays host to the data centres of a number of US internet giants, including Amazon, Facebook and Google.

The European parliament voted in favour of the draft regulations more than a year ago, but the Council of the European Union, which represents individual member states' governments, has struggled to come to an agreement.

The consensus of the ministers will now mean a three-way discussion between the European Commission, the European parliament and the Council of the European Union on each of their amendments to the European Commission's proposal. These discussions will start next week, but will not finish until the middle of next year - becoming law in 2017 at the earliest.

The result may be a single European data protection and privacy regulator, as well as a ratcheting up of penalties from the current suggested €1m (£0.7m) or two per cent of global turnover, to €100m or five per cent of turnover.

Earlier today: EU's new data protection rules will "kill cloud computing" in Europe, warn Amazon, Cisco, IBM and SAP