The Government has sought the support of the European Commission in a legal battle involving the US federal authorities and tech giant Microsoft.
The case centres on a US criminal warrant demanding that Microsoft hand over emails and other data that are held in a data centre in Dublin.
The case is seen as a major threat by hi-tech multinationals to their ambitions to offer services based on data storage outside the US.
The request, made by a New York judge, is in connection with a narcotics investigation.
It is seen as a key test of how data protection laws can be applied to multinational corporations which operate in different jurisdictions.
The Government has this evening formally requested the European Commission to check if EU data protection laws would be breached if the US authorities were to seize data in Dublin on foot of a court order.
Microsoft has so far refused to accede to the order and has chosen to be in contempt of court while it appeals the decision.
The company disputes that the US has extra-territorial powers to seize data held outside the country, and claims that its entire cloud computing plans worldwide would be jeopardised if the US authorities could access such data because it would erode the trust of consumers.
The Government has objected to the court order which would allow the US authorities to seize data held in Irish data centres.
Minister for European Affairs and Data Protection Daragh Murphy has already raised the issue with Ireland's data protection commissioner on the basis that allowing the US authorities access to data held in Ireland could be in breach of Irish privacy laws.
Instead the Government wants to cooperate with the US using Mutual Legal Assistance Treaties which have existed between the US and EU member states and which have historically been used in data issues between the two blocs.
In a letter to the European Commission the Government has requested that it take a legal position - known as an Amicus Brief - on whether or not European privacy laws have been breached.
In a court filing Microsoft argued that crucial privacy and commercial issues hinged on the company's ability to resist US investigators seeking to grab data outside United States borders.
As reported by Bloomberg, the filing read: "Over the course of the past year, Microsoft and other US technology companies have faced growing mistrust and concern about their ability to protect the privacy of personal information located outside the United States."
Mr Murphy said the case has raised important issues between "the respective legal regimes in the European Union and the United States, particularly in relation to the protection of data."
He said Ireland, the EU and the US have excellent relations with respect to cooperation on criminal matters, however "when it comes to the transfer of personal data, it is vital that we get the process right".
