Ilse Aigner, an avid user of the online network, said a meeting with Facebook policy director Richard Allan led her to conclude the company was not serious about improving its privacy controls despite assurances it has given.
"Talks today unfortunately confirmed my skepticism," she told reporters in Berlin. "Several privacy controls have been improved, but what is being done to date is not sufficient and is in breach of German law."
Last week, the world's largest social network unveiled a set of features it said would give its nearly half-billion users better control over what data they share with the public.
Aigner said the changes were not enough and the company continued to modify its services so that users had to monitor profiles and actively "opt out" of new features that shared their data automatically with third parties.
"A U.S. company that earns money in Germany cannot ignore this... it is not very easy to check settings and many options must be changed by the user. It's easier to read a tax return."
Facebook co-founder Mark Zuckerberg has said some aspects of the site such as a new "instant personalization" feature that automatically shares users' data with websites like Pandora and Yelp are part of what made Facebook an innovative company.
But default data-sharing has kicked up a storm in Germany, which has some of the toughest privacy laws in the world as a result of its experience with state surveillance once run by the Nazis and then by the former East German Stasi secret police.
Facebook has around 8 million members in Germany, but the country is also home to some of its most vocal critics. Aigner said the main problem with the site was that it forced users to 'opt out' of data-sharing instead of asking them to 'opt in'.
"I think many people are unaware of the extent to which their data is being made public ... If it's so easy to 'opt out' of new features, as Mark Zuckerberg says, why cannot the design be changed to allow users to 'opt in' to data-sharing?"
Aigner said authorities in Hamburg that are responsible for data protection were already looking into the matter, which she said she would follow closely. "It is a massive encroachment and I assume there will be fines," she said.
Aigner said she would leave the site shortly, but first she would have to notify "8,300 group members and 4,334 friends."