A top European official has announced plans to begin a major overhaul of European Union privacy laws, saying that the existing framework has failed to keep pace with technological innovation.

Viviane Reding, the EU's Information Society and Media commissioner, said Thursday that she seeks to modernize the general privacy directive the EU has had in place since 1995, singling out social networks and RFID tracking tags as examples of technologies that have vaulted ahead of current statutes.

In a statement, Reding warned of the uncertainty -- both for consumers and businesses -- that will come as technology falls out of sync with the EU's legal framework.

"EU rules are there to protect everyone's personal data," Reding said. "EU rules should allow everyone to realize their right to know when their personal data can be lawfully processed, in any area of life, whether boarding a plane, opening a bank account or surfing the Internet, and to say no to it whenever they want."

Reding's announcement comes at a time of heightened awareness over Internet privacy matters among officials and lawmakers in several countries, including the United States.

The same day Reding made her comments -- a day that happened to be designated Data Privacy Day in Europe and North America -- the U.S. Federal Trade Commission held a day-long workshop exploring various aspects of the Internet privacy debate.

In broad strokes, the argument turns on the appropriate role of government in policing online data collection practices -- namely, should an agency like the FTC adopt binding rules that would set bright lines defining what type of information Web firms are permitted to collect and how they must obtain consent from consumers.

That friction was particularly evident at one session in yesterday's workshop, when representatives of Facebook and LinkedIn argued against setting rules that would govern the social networking space, particularly the third-party applications that are a fast-growing segment of the technology economy.

Reding acknowledged that it's a difficult balance to strike, but reiterated her commitment to putting consumers first.

"Innovation is important in today's society but should not go at the expense of people's fundamental right to privacy," she said.

European regulators have historically taken a more assertive role in setting privacy standards than U.S. regulators. Many policy changes major U.S. Web companies have implemented, such as reducing the time users' IP addresses are stored in server logs, have come at the behest of European authorities.

In the meantime, Facebook finds itself back under the microscope in Canada, where regulators have opened an investigation into the site's recent changes to its privacy settings, responding to complaints that the new system encourages users to share more information than before.

It is perhaps a note of irony that Facebook's site-wide privacy revamp came at least in partial response to an inquiry from Canada's privacy commissioner, the same office that is heading up the new probe.

Facebook has staunchly defended its recent privacy overhaul, arguing that the new settings give people greater control over how they share information and have driven awareness about privacy across the community.

But those assurances haven't been enough to mollify some U.S. consumer-protection groups, who have banded together to file a complaint asking the FTC to open an investigation, charging that the changes are deceptive and violate consumer protection law.

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.