The advent of internet as a means of conducting trade has created new challenges. It is not the first time that technology challenges the efficiency of the current legal framework but the extent of the threat to privacy renders a new approach imperative. In the light of this realisation the different approaches towards data protection in the EU and US are thoroughly analysed. The divergence in the approach is flowing from different historical developments and experiences and hence different legal traditions. The adoption of the EU Directive on Data Protection has been the milestone which reset the debate on a wholly different basis. It revealed the cultural and legal differences between the two sides of the Atlantic and underlined the difficulties in agreeing upon a common solution. The paper focuses on the analysis of the relevant historical and legal framework in the EU and US and concludes with certain proposals of legal and technological nature to deal with the problem. Its central thesis is that the challenges that internet poses on privacy should be dealt within the context of Europe’s established legal and humanistic traditions.

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