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The advent of internet asa means of conducting trade hascreated new challenges. It is not the firsttimethat technology challenges theefficiency of the current legal framework but theextent of the threat to privacy renders a newapproachimperative. In the light of this realisationthe different approaches towards data protection inthe EU and US are thoroughlyanalysed. The divergence in the approach is flowingfrom different historicaldevelopments and experiences and hence differentlegal traditions. The adoption ofthe EU Directive on Data Protection has been themilestone which reset the debate ona wholly different basis. It revealed the culturaland legal differences between the twosides of the Atlantic and underlined thedifficulties in agreeing upon a commonsolution. The paper focuses on the analysis of therelevant historical and legalframework in the EU and US and concludes withcertain proposals of legal andtechnological nature to deal with the problem. Itscentral thesis is that the challengesthat internet poses on privacy should be dealtwithin the context of Europe'sestablished legal and humanistic traditions.