European Union justice chief  Viviane Reding proposed a revamp on the EU’s data protection law that has been around for 16 years now. It specifically addressed social network giant Facebook and search titan Google of possible court action if they fail to comply with the new directive. They also named Yahoo and Microsoft on the watch list. The amendment aims at protecting user privacy and preventing personal data exploitation, which has become a growing concern for both Facebook and Google, as they seek personalized services and data collection to improve search results, recommendations and advertising revenue.

With the new set of rules, users will be given the right to withdraw their information from websites, calling it the “right to be forgotten.” Moreover, prior to collecting data, it should be stated by any company or website why they are collecting data and what it is for.

“Any company operating in the EU market or any online product that is targeted at EU consumers must comply with EU rules,” Reding said in a speech. “To enforce EU law, national privacy watchdogs shall be endowed with powers to investigate and engage in legal proceedings against non-EU data controllers,” she added.

Reding’s proposal is not final yet and is still subject for renegotiation. However, it is expected to take effect EU before July if the EU government bodies and EU Parliament will ratify it. This move follows the clash between the US and EU when the European Parliament rejected United States’ proposal of bank transfer data sharing for counter-terrorism investigation purposes.

It’s a good thing that entities such as the European Union and FTC are stepping in to protect user’s personal data. Most users seem to not know the implications of sharing private information on the internet, and it eventually becomes an opening for exploitation.  US Senators John Kerry and John McCain are both currently working on a privacy bill, as the internet is gaining phenomenal concentration, while the FTC is conducting more investigations around consumer interests.

There have been a lot of companies that FTC called out for playing outside the rules. Facebook and Google more notably, and just recently Twitter, for it has “deceived consumers and put their privacy at risk by failing to safeguard their personal information.” It has already settled with FTC on this matter, but its security program still has to undergo external audits every two years, for the next ten years.

While Facebook must tread lightly with the EU, it’s working towards solidifying its hold on the social search market. Facebook released a new privacy policy in conversational English, eliminating the jargons for easier comprehension. It also developed a new interactive tools demonstrating how personal data gathered from users is used. While privacy advocates adored them for doing so, critics are still skeptic saying Facebook didn’t really lay everything on the table. The social network has also been awarded of a patent for social search they filed back in 2004.