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If EU data protection laws get the green light the impact on the UK will be greater than other European countries because of the relatively low penalties that are currently handed out for losing sensitive data.
The EU put foreard proposals last week to harmonise data protection laws with plans to make it mandtary to disclose a breach and set the penalties as a percentage of turnover, which could run into millions for most firms.
The current position in the UK, upheld by the Information Commissioners Office (ICO) is that a fine of up to half a million pounds can be handed out to those that are careless with customer records.
Among the many reactions from the industry to the changes, with most applauding tougher penalties, there has been one note of caution from IDC that the law change will have major consequences.
"For harmonisation to happen, the privacy rules have to meet the sensitivities of the most conservative countries, in particular Germany, otherwise we will just end up where we are now, with a highly fragmented landscape and no legal certainty for companies operating in the EU," said David Bradshaw, research manager for cloud services at IDC.
"The main problem is that the new rules are far more robust than those that apply in many other EU countries, in particular the UK. These countries will bear the main cost of getting to a single market," he added.