German Chancellor Angela Merkel says she will consult France about the creation of a European communications network to avoid emails and other data automatically passing through the United States.
In her weekly podcast, Mrs Merkel says she will raise the issue with French president Francois Hollande during her visit to Paris next week.
The German leader said it was wrong that Facebook and Google can be based in countries with low levels of data protection while carrying out business in nations like Germany that offer more rigorous safeguards.
"Above all, we'll talk about European providers that offer security for our citizens, so that one shouldn't have to send emails and other information across the Atlantic," she said. "Rather, one could build up a communication network inside Europe."
Revelations of mass surveillance by the US National Security Agency - including the alleged tapping of Mrs Merkel's cell phone - have prompted huge concern in Europe.
Disclosures by the US whistleblower Edward Snowden suggested even the mobile phones of US allies, such as Mrs Merkel, had been monitored by American spies.
Classified NSA documents revealed that large amounts of personal data are collected from the internet by American and British surveillance, the BBC reports.
Personal privacy is a sensitive issue in Germany where extensive surveillance was carried out under the Nazis and in communist East Germany.