Firms may face five percent fines for data loss

Companies which suffer major data breaches could be fined up to five percent of global turnover under new European data rules.

Firms found to have mishandled data may fall foul of data breach notification rules that are due to be updated next month, according to leaked documents seen by the Financial Times.

The European Commission is considering the large increase in data breach fines, but the new rules have not yet been finalised, Commission justice spokesman Matthew Newman told ZDNet UK on Tuesday.

"There will be much more consistency in terms of sanctions," Newman said. "Draft documents have been circulated. There's a lot in the proposals that's interesting."

The Commission is aiming for Europe-wide parity in data regulation, justice commissioner Viviane Reding said at the 2nd Annual European Data Protection and Privacy Conference in Brussels on Tuesday.

"Inconsistent rules hold back businesses," said Reding. "If we want to encourage companies to take advantage of new technologies and operate across borders, we need to make the rules simpler."

Reding is leading the Commission's review of 1995 European data protection legislation. On Thursday, Reding said that businesses will find it easier to enforce pan-European privacy rules under the updated legislation.