The European Parliament wants to give European citizens the ability to block or control targeted advertising and online Web tracking.
The US tech industry is trying to get these proposals dropped or watered down. A third of the US tech industry's revenues come from Europe.
The US DoC is lobbying on behalf of the US tech industry.
It is said that the rest of the world is closely watching which side wins as it will determine the future direction of the tech industry.
According to Ben Wizner, a lawyer involved in the case, the US does not have general data protection laws like we have in Europe - merely specific protection for things like medical and financial information.
Otherwise companies can try to find out anything they want about individuals.
The EU proposal is that companies could not collect data on individuals unless the individuals gave their explicit consent.
Furthermore, businesses would have to remove personal data they had collected upon the request of an individual.
National regulators would be able to fine companies up to 2% of annual sales for failing to comply.
Last month the US Ambassador to the EU argued that individuals should not have to give their explicit consent to having information about them collected by companies.
The proposals under consideration by the European Parliament and 27 European Justice Ministers should be drafted by April and then go for legislation coming into force next year.