Technology groups Facebook and LinkedIn have agreed to beef up their international privacy and compliance teams in response to demands from the Irish regulator, the deputy Data Protection Commissioner told Reuters.
Recent high-profile data lapses, such as LinkedIn's security breach that exposed millions of user passwords, have highlighted the difficulties for web giants and regulators alike of protecting consumer data.
Some of the world's major tech players, including Google, have moved to set up their international or European headquarters in business-friendly Ireland in recent years.
Facebook's Ireland office, with approximately 400 employees, handles all its users outside the United States and Canada. The group has over 900 million users, most of them outside of North America.
Facebook, the world's largest social network, agreed at the end of December to overhaul privacy protection for users outside North America after the Irish regulator found its policies were overly complex and lacked transparency.
"They're beefing up their privacy functions in Ireland by bringing in people who've taken a lead in the U.S.," Gary Davies, Deputy Data Protection Commissioner (DPC), told Reuters.
LinkedIn, an employment and professional networking site with more than 160 million members, said it is bulking out its privacy team, with the appointment of a key executive at its Dublin headquarters.
"We are putting additional privacy resources in Ireland and moving one of our key directors to our International HQ in Dublin," a spokeswoman at LinkedIn told Reuters via email.
Davies confirmed that the DPC is currently investigating the LinkedIn security breach.
The Irish regulator will revisit Facebook's offices on July 10 to re-audit and will publish its report in September or October, said Davies.
Facebook, whose shares slid after its recent $16 billion IPO, said it had agreed to a six-month progress review in July.
"Facebook has cooperated with the DPC throughout the review process and we look forward to updating them fully over the coming weeks," a spokesman at Facebook said, declining to comment on the enlargement of its privacy team.
Data protection laws are under review in Europe amid rapid change in how people use the Internet and as services such as cloud computing - allowing data to be stored on distant servers to be accessed anywhere - become mainstream for business.
As most large U.S. tech companies have a substantial or lead European presence in Ireland, other tech companies such as Apple, Microsoft, and Twitter can also be expected to be examining designating Ireland as their European data protection regulator, said Davies.
The number of investigations opened by the Irish regulator in 2011 was double what it had been five years previously.
LinkedIn will be subject to a routine audit over the next 12 months to check compliance with European Union data protection law, said Davies.