European Union officials agreed Tuesday on EU Data Protection Reform regulations, which could mean daunting prospects for U.S. tech giants doing business in the Continent.

According to the International Business Times, the new data privacy laws will impose grave penalties on companies that fail to protect its users' personal data or mishandle their sensitive information. Twitter, Facebook, Apple, and Google would face big problems in conducting business in Europe due to these regulations.

The sweeping data regulations were first proposed four years ago. Twenty eight EU member states agreed on the laws, which require companies to disclose data breach within 72 hours. Otherwise, they have to pay as much as 4 percent of their annual revenue, which could amount to hundreds of millions of dollars.

The Wall Street Journal reported that the digital-privacy regime is opposite to the practices that are traditional to the US companies. Companies from health-care to advertising have been using data collected from apps and sensors to analyse for their operations. However, the new laws will become an obstacle for these companies who depend on user profiling and data mining to do business.

Visa, Inc. Chief Privacy Officer and Head of Data Use Jack Yang said the new law will be a game-changer. Meanwhile, executives from certain Silicon Valley firms fear that the new law will raise significant threat since it has legal uncertainty and big fines.

The Guardian wrote that the new data privacy rules include the General Data Protection Regulation (GDPR), which aims to regulate the privacy and use of sensitive data from European citizens. It also includes the Data Protection Directive, which governs how the law enforcement uses the data of European citizens. One part of the GDPR that poses a challenge to US tech companies is its power to determine whether digital consent age would be raised to 16 from 13.