RING-FENCES

CNIL's Falque-Pierrotin said the Prism scandal had highlighted the fact people were hungry for more transparency and for there to be ring-fences around their personal data.

European citizens and leading politicians have expressed outrage that they have no legal rights to protect themselves from such spying, and US President Barack Obama was forced to defend Prism at length during a news conference on a trip to Germany on Wednesday.

"There is a mass of personal information floating about on people in the Google galaxy that people are not even aware of," Falque-Pierrotin said. "All we are saying to Google is that we would like it to lift the veil a little on what it's doing."

Chief among CNIL's concerns was the way Google combines anonymous data from users' browsing histories across its services to better target advertising.

Google can either negotiate with national regulators and change elements of its privacy policy or challenge their authority to impose changes in court.

Penalties cannot be imposed EU-wide and must be done country by country. But the European Parliament is debating a draft data protection law under which transgressors could be fined as much as two percent of their yearly global turnover.

Privacy issues are not Google's only legal headache in Europe. It is seeking to settle a three-year probe with antitrust regulators into whether it squeezes out online rivals in search results. Brussels has also started looking into Google's Android software that runs mobile phones, to see if it crimps competition in the handset market.