Officials in Brussels have put a spanner in the works of plans for a new deal for sharing personal data collected by companies between the US and Europe.
Privacy watchdogs said the revision of the Safe Harbour agreement, which was ruled invalid in the courts last year, needs greater clarity and revisions before being applied.
The new deal, known as Privacy Shield, needs to better safeguard people's personal information, officials said. The group of lawmakers is worried about bulk collection of US data by the US and the redress consumers will have with the US.
Isabelle Falque-Pierrotin, the chairman of the group today said: "The possibility that is left in the Shield for bulk collection which if massive and indiscriminate is not acceptable."
She added: "We believe that we don't have enough security [or] guarantees in the status of the ombudsperson and in their effective powers to be sure that this is really an independent authority."
The 15-year-old Safe Harbour until last year governed data transfers across the Atlantic. It was ruled invalid as a result of a case brought by Austrian student Max Schrems. Following the Snowden NSA surveillance revelations, Schrems argued that Ireland's data regulator, which oversees Facebook in Europe, failed to protect users from "snooping".
The EU has since been scrambling to get a new agreement put in place. But the hold up is "transatlantic chaos" according to one legal expert.
"If the Privacy Shield doesn't get adopted, countless US businesses will be left scratching their heads in wonder as to how they can continue to service their EU customers lawfully," said Phil Lee, a data privacy partner at law firm Fieldfisher.
While the group's opinion is not binding, it will leave the European Commission wondering whether to move forward with the deal, which had been expected to apply from June.
"The Working Party's opinion creates a real problem for the Commission. Does it go against the view of the working party and adopt the Privacy Shield anyway? Or does it go back to the drawing board with the US Department of Commerce and try to negotiate a better deal?" said Lee.