The Brazilian government is pushing for new legislation to force internet majors including Google and Facebook to establish local data storage centres following reports that the US explored e-mails of President Dilma Rousseff.
As per the new anticipated law, internet firms may have to move according to Brazilian privacy rules and the government could also store confidential information including tax information within the country to protect it from foreign espionage.
Forcing Internet firms to store user data locally is also anticipated avoid Brazilians access to some services offered by foreign firms.
The Brazilian President Dilma Rousseff has also called off the state visit to Washington in October in response to the alleged intrusions, and would go ahead only if the US government offers suitable descriptions concerning the allegations.
However, White House Press Secretary Jay Carney said that as the President previously stated, he has directed a broad review of US intelligence posture, but the process will take several months to complete.
"President Obama and President Rousseff both look forward to the state visit, which will celebrate our broad relationship and should not be overshadowed by a single bilateral issue, no matter how important or challenging the issue may be," Carney said.
"For this reason, the presidents have agreed to postpone President Rousseff's state visit to Washington scheduled for October 23."