Facebook claims companies could start court battles with data protection authorities if the regulators are given powers to levy fines of 2% of global turnover for data protection law breaches.

Facebook said the European Commission's proposed sanctions regime - which is contained in its draft General Data Protection Regulation - could also put off US and other businesses from trading within the EU, meaning less jobs being created.

In addition, it claimed the proposed legislation could undermine the privacy benefits the Commission was seeking.

Facebook's stance has been revealed after campaign group Europe v Facebook published a Facebook response to a consultation by the Irish Data Protection Commissioner (DPC) on the Commission's proposed regulation.

The group said it obtained the Facebook's response document following a freedom of information request to the DPC.

Facebook said: "The high level of potential sanctions for breaches of the regulation risks turning relations between companies and regulators into a combative one, and may undermine the incentive of internet companies to invest in the EU."

It added: "Facebook is concerned that the magnitude of potential fines will create a disincentive for innovation and associated job creation among internet service companies.

"This could be a major blow for the European Union given that the internet sector is widely recognised as the major driver of job creation and growth in an otherwise moribund economic environment."

Facebook added the high level of potential fines "might create a disincentive for open engagement by companies with regulators". It said: "Ultimately this will not deliver privacy benefits as effectively as a less litigious model. The proposed regime will likely lead to lengthy court cases, potentially at considerable cost for the state."

The Commission's justice commissioner recently told ministers from European Union member states she was prepared to offer some concessions to small businesses and the public sector in revising forthcoming data protection regulation.

Vivane Reding told the Justice and Home Affairs Council meeting in Luxembourg last month that the revised regulation needs "the right firmness of touch", but that she doesn't want to over-burden small and medium-sized enterprises (SMEs).

"SMEs are already exempt from some requirements, like having a data protection officer. The Commission is prepared to look at whether this SME exemption could be broadened to other areas and that we can also look to add further flexibility through an approach that takes into account the amount and sensitivity of the data processed," said Reding.

But she was firm that she would not fall into a lobbyists' trap of granting provisions for SMEs that were really designed to help large multinational firms.