The European Union will leave the setting of fines for breaching proposed new data protection laws largely to national bodies, European Commissioner Viviane Reding said after reports that the EU planned to fine companies up to 5 percent of their turnover.
The proposed new legislation, which Reding will unveil on Wednesday, is designed to give individuals more control over personal data that they entrust to companies like Facebook or Google, and harmonize data law across the EU.
Details that have emerged from drafts of the legislation that have been widely leaked have sparked concerns that the new rules will be complicated and expensive to enforce, and sanctions too harsh.
The new rules foresee forcing social networks to allow users to close their accounts and take their data with them, and to have data erased from the Internet where users have not given or in some cases where they withdraw their consent.
The most recent draft seen by Reuters proposes fining organizations a maximum of 1 percent of turnover for breaches such as losing user data, but Reding said specific levels had not been set.
I have never put maximum fines in the pipeline, she told Reuters in an interview at the annual DLD digital industry conference in Munich on Monday.
Reding, who is vice president of the European Commission and is driving the new legislation, said national data protection authorities would set the level of sanctions in accordance with the new laws.
We are speaking about giving to the national regulation authorities the capacity to come out with sanctions. It is up to them to fix the level, she said.
A spokeswoman for the Commission said the EC would likely set absolute maximum levels for the most serious breaches, which would not be as high as 5 percent.
The European Union has not shied away from imposing large fines on U.S. companies in the past, fining Microsoft a record $1.4 billion for anti-competitive behavior in 2008, and Intel a similar sum the following year.
Reding, in her previous role as commissioner for information society and media, established herself as a champion of consumer rights by forcing mobile operators to cut unpopular roaming charges for making phone calls while abroad.
On Monday, she said sanctions were a last resort and not her main focus.
We are not going for sanctions. We are going for protecting the individual, for opening the market, for bringing down the enormous costs, she said.
Reding says creating unified data protection laws for the EU's 27 countries will cut the costs of running digital businesses in the bloc by 2.3 billion euros ($3 billion). ($1 = 0.7665 euros)
(Reporting by Georgina Prodhan; Editing by Helen Massy-Beresford)