Social networking sites and search engines could face action if they flout new privacy rules being laid down by the EU in an overhaul of the EU’s 16-year-old laws on data protection.

EU justice chief Viviane Reding is to propose the changes in the coming months to enforce more safeguards on the use of personal information. It is believed that most of the changes would target sites such as Facebook and Google.

"Any company operating in the EU market or any online product that is targeted at EU consumers must comply with EU rules," Reding, who oversees justice and human rights in the executive European Commission, said in a speech.

Reding said that European citizens’ rights over data collection were important regardless of where it was being done. She is likely to force companies to allow users to withdraw any data held by the websites and also make them more transparent about the data collected and the reason why they were collected.

She added that there should be a "right to be forgotten" for Internet users.

The new rules would give users a right to withdraw their consent to sharing their data. And after that no traces of their data must be left in the website.

With many of the companies or data centres based in the US, she said enforcing agencies in EU countries should be given more powers.

"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 said.