The recently proposed national database could force UK companies to move abroad, the Foundation for Information Policy Research has said.
Ross Anderson, chair of the foundation, explained its introduction would put the government at odds with a number of companies.
"If they won, it would impose huge costs on the online industry and make Britain an unattractive place to run any kind of communications service firm," he said.
Mr Anderson noted that no other EU country collects as much information, "so the effect of the proposed law would be to get firms to move their operations from the UK to other EU countries".
The register would be part of the government's Communications Protection Bill and has already attracted criticism from assistant information commissioner, John Bamford.
He told the Times: "We have real doubts that such a measure can be justified, or is proportionate or desirable."