The way a US court has forced Microsoft to disclose foreign-held data is objectionable and could have implications across Europe, according to Minister of State Dara Murphy.
The comments relate to an action taken by US drug trafficking prosecutors to compel Microsoft to hand over details of an email account held on its Dublin servers.
Judge Loretta Preska, chief of the US district court in New York, has given Microsoft until tomorrow to comply with her new order that a search warrant should be executed, it was reported.
However Mr Murphy, who has special responsibility for data protection, said due process and an international treaty should be adhered to.
"Co-operation in the area of law enforcement is a fundamental element of our international relations, in particular with our partners in the US, which is why the issue of the transfer of the data itself is not objectionable, but rather the process that is being utilised”, he said.
"We must ensure that our data is afforded the maximum protection available and only transferred to other jurisdictions after the process set down in the Mutual Legal Assistance Treaty has been followed."
Faith in cloud computing, where vast quantities of information are stored on servers rather than the user's computer, has been affected by Edward Snowden's revelations about US surveillance and by the recent hacking of hundreds of celebrities' photos.
Mr Murphy said compliance with the warrant may result in Microsoft and other US companies with operations in the EU being in breach of the Irish Data Protection Acts and the EU Data Protection Directive if they are served with such warrants in the future.
He said: "This would create significant legal uncertainty for Irish and EU consumers and companies regarding the protection of their data which, in this digital age, is everyone's most valuable asset."
The case centres on an investigation into narcotics trafficking.
US prosecutors reportedly obtained a search warrant last December to access an email account controlled and maintained by Microsoft servers in Dublin.
Mr Murphy said he was monitoring the case closely and would be seeking the advice of Ireland's data protection commissioner and the attorney general.
"I will also be discussing the implications of this court ruling with both the US charge d'affaires and the American Chamber of Commerce in Dublin with a view to informing the Government of appropriate courses of action."
A Mutual Legal Assistance Treaty in Criminal Matters between Ireland and the US has been in force since 2001.
The minister added: "This provides for the due process to be followed for the request and transfer of data in criminal matters."