The US Senate has blocked a bill which would have ushered in overarching reform of the National Security Agency after the scale of US surveillance was made clear by whistleblower Edward Snowden.
Votes fell just short of the 60 needed for consideration coming in at 58-42.
The USA Freedom Act called for an end to the collection of US phone data but was voted down, largely by Republicans, over fears that it would expose the country to greater risks of a terrorist attack.
It had been backed by the Obama administration, leading technology firms such as Apple, Google, Microsoft and Yahoo along wiith most civil liberty campaigners despite late amendments which significantly watered down its scope in a bid to reach consensus.
They are now pinning their hopes on next year when a fresh debate over security and civil liberties will kick off, opening the door to a fresh attempt to reign in the security services.
Speaking to The Drum, Mike Zaneis, executive vice president of Public Policy & General Counsel at the IAB, stated: "This was a bill that garnered widespread support from industry and advocates alike but still failed to clear the Senate. This is a clear indication of just how difficult it is to enact new privacy legislation."