The Financial Times reports that an unpublished paper circulated by the 'Article 29 working party', the European Commission's privacy regulator, is calling for increased scrutiny of social networks, such as Facebook, which make user data available to app developers.
Websites like MySpace and Twitter also allow developers to create applications for users, sometimes at the expense of user privacy.
Marketers, not just developers, who are using social networks to reach out to customers should also be subject to tough European privacy regulations, the report said.
Even users with a high level of influence -- or friends -- would fall under scrutiny, especially celebrities or brands unacquainted with their followers.
The Article 29 paper is intended to act as a guideline for individual regulators. It has been applauded by privacy campaigners in the US.
Marc Rotenberg, head of the Electronic Privacy Information Center in Washington, told the FT: "We've been concerned about the growing third-party use of personal information".
He said little is known about the amount of data social networks are handing over to developers.
Facebook issued a statement that said it agreed with the report's suggestion that the online industry needs a set of guidelines so companies can "continue to innovate and provide people with useful websites to meet their needs".
Facebook said: "The opinion issued by the Article 29 working group on social networking services is an important step in providing the industry with practical guidance for their operations in the EU.
"It will now need to be assessed in detail by all companies with services in this area."