The European commission has strongly backed a call from Germany's chancellor, Angela Merkel, for tougher data protection laws that would require internet companies to reveal details about who receives personal information from them.

The EU's justice commissioner, Viviane Reding, urged all EU member states to follow Merkel's demand for strict privacy rules to ensure companies such as Facebook and Google face a common disclosure regime, and not just the national data protection rules in the country where they are registered.

"Such common European rules are indeed the best way to ensure a solid protection of the personal data of EU citizens, also with regard to companies from third countries operating in the EU," said Reding.

"Europe must stand united on this matter, which, at the heart of European values, concerns the fundamental rights of EU citizens and is in addition of great importance for the European single market."

Merkel placed the issue firmly on the European agenda in a set-piece interview on Sunday after facing criticism for failing to protect German citizens from the wholesale surveillance of internet and telecommunications traffic conducted by US and UK intelligence services.

The allegations of widespread internet snooping made by Edward Snowden, the US National Security Agency whistleblower, have led to a sharp debate during the German election campaign, with the opposition SPD accusing Merkel of breaking her oath of office by failing to protect German citizens.

Merkel challenged other EU member states, such as the UK and Ireland, with less rigorous data protection regimes than Germany to back tougher regulation.

"Internet companies which are operating in Europe, such as Facebook and Google, must give … European countries the information about whom they have given data to," said Merkel.

She said that while Germany had a "very good data protection law", a company such as Facebook, which is registered in Ireland, was subject only to Irish law. She said Britain also had "a very different philosophy" about data protection, and very different laws about granting intelligence services access to communications data.

Merkel added: "I expect a clear promise from the American government that in the future they will observe German law on German territory. We are friendly partners. We are in a defence alliance and we must be able to rely on each other."

The European justice commissioner called on all EU member states to follow Merkel's lead on data protection reform. A draft directive was presented by the commission in January 2012 and EU officials hope it can be finalised before the European elections next year. It has formed one of the most controversial parts of the US-EU trade negotiations.

"I would find it helpful if the European council in October – which will deal with the digital single market – could address this matter and speed up the work in council on this important matter," said Reding.

The issue of US-UK internet surveillance is also to be raised at an informal meeting of European justice and home affairs ministers in Vilnius on Thursday and Friday this week.

The UK justice minister Lord McNally, who will be at the meeting on Friday, gave a clear indication that Britain was likely to reject Merkel's call: "The government wants to see EU data protection legislation that protects the civil liberties of individuals while allowing for economic growth and innovation. These should be achieved in tandem, not at the expense of one or the other.

"We do not believe the current European Union proposals strike the right balance. We are negotiating for EU legislation that contains less prescription and cost burdens while providing greater flexibility for member states to tailor legislation according to national tradition and practice."

Britain has so far played a crucial role in blocking European agreement on the new data protection regime.