The European Parliament on Wednesday overwhelmingly backed the European Commission's revised Data Protection Directive, which governs the use and movement of personal data.
The next step will see the proposals debated by the Council of Ministers at a meeting scheduled for June.
"The message the European Parliament is sending is unequivocal: this reform is a necessity, and now it is irreversible. Europe's directly elected parliamentarians have listened to European citizens and European businesses and, with this vote, have made clear that we need a uniform and strong European data protection law," said European justice commissioner Viviane Reding, in a statement.
The reforms aim to establish a single pan-European law in a bid to simplify the regulatory landscape. The directive will give citizens the right to be forgotten, meaning companies that hold information on a person without a legitimate reason must, upon request, delete said information. It will also give people the means to transfer their data between service providers. Companies will also require explicit consent, rather than assumed consent, to process an individual's personal data. In addition, if a firm wishes to transfer a customer's data outside the EU, it must first obtain authorisation from a national data protection authority and inform the person concerned.
"Strong data protection rules must be Europe's trade mark. Following the U.S. data spying scandals, data protection is more than ever a competitive advantage," Reding said.
Companies that fall foul of the Data Protection Directive – regardless of whether they are based in Europe or elsewhere – can be fined up to 5% of their global annual turnover if they fail to comply.
"It will be important to ensure that the fines are not disproportionate for small businesses, such as the flourishing tech start-ups on which European policymakers are relying to boost the EU's economy," said Ovum regulation analyst Luca Schiavoni, in a research note.
"A phased introduction, or a more detailed differentiation in the set of fines, will be necessary in this respect," he said.