A lot have been talked about the privacy concerns raised by search engines storing the search data and other personal information (like IP address and timestamp). An European Commission study has pointed out that search engines (read Google and Yahoo!) violate European data protection rules by storing the data for longer time. Also, concerns have been raised about lack of user awareness about how the data is being used.
If put into effect, EU can effectively curb the privacy issue all over the planet (at least US!) since it will be difficult to track whether the user is an European or not. Maybe, Google will start asking for you nationality before starting the search. And also, I recommend to all those who fear privacy breach can register a new Google or Yahoo! id with an European nation as the country of residence (or nationality!)
An extract from the ARTICLE 29 DATA PROTECTION WORKING PARTY (pdf)
'4.1.1. The fundamental right - respect for private life
"The right to respect for private life, as enshrined in Article 8 of the European Convention on Human Rights and Fundamental Freedoms (ECHR) lies at the core of European data protection laws. The extensive collection and storage of search histories of individuals in a directly or indirectly identifiable form invokes the protection of Article 8 ECHR. An individual's search history contains a footprint of that person's interests, relations, and intentions. These data can be subsequently used both for commercial purposes and as a result of requests and fishing operations and/or data mining by law enforcement authorities or national security services....." '