Germany and Google remain at odds over how the company holds certain data used for its Street View map imagery.
Google was given a deadline of 10 a.m. Wednesday to agree to 12 points regarding Street View in order to comply with Germany's privacy laws, which generally restrict photographs of people and property except in very public situations, such as a sporting event, without a person's consent.
The final sticking point concerns partially censored images where Google has blurred items such as license plates or peoples' faces, said Johannes Caspar, who heads the data protection agency for the Hamburg area.
Hamburg as well 15 other German states want Google to permanently delete that information from its databases in order to comply with the law, Caspar said. Google, however, says it needs to retain that data in order to make its automated blurring technology more accurate, Caspar said.
Google built its own application for automatically detecting faces and license plates, which it says is up to 99 percent accurate. Google has argued to Hamburg that it needs to retain the data since the blurring technology is self-learning and needs more data to improve.
Caspar said technology experts from his agency are investigating to see if Google's claims are accurate and will contact the company next week.
If an agreement isn't reached, Germany could fine the company. "We should not give them the option to take these pictures if they are not willing to follow German laws," Caspar said.
Another recommendation from the Hamburg agency is that Google should obscure peoples' faces more thoroughly, as the current level of blurriness doesn't necessarily prevent a person from being identified, Caspar said.
Google said it is working with German data protection authorities but did not provide more detailed information.
"After positive discussions with the German Data Protection Authorities we have made good progress towards finding solutions to their concerns about Street View," according to a company statement.
Data protection officials throughout Germany have received more than 300 complaints over the collection of images for Street View, Caspar said.
Google has encountered opposition and complaints about Street View in other places, but regulators haven't intervened.
The company has emphasised Street View's reporting system where people can report an inappropriate image or request one be removed. Google's policy is to remove images of people if they complain as well as black out people's homes when requested as soon as possible.
Vehicles equipped with periscope-like cameras collect the imagery used for Street View, which went live in the US around 2007 and is available for about 100 urban areas.