"Many in Germany are rightly concerned over the information on the activities of the NSA (National Security Agency) regarding the security of their private information," the government's spokesman Steffen Seibert told AFP.
"In this context, the [German] government welcomes in principle the fact that data protection and the rights of the individual will be better protected in the future, including for non-Americans," he added.
"For the government, German law must be respected on German soil, and that is the same, in particular, for our closest partners and allies."
Seibert also stressed that cooperation between allied intelligence services was in the "public interest" and that the German government would now "closely analyse" the statement by the American president.
Obama promised Friday that the US intelligence agency would not routinely spy on leaders of America's closest allies.
Germany was outraged by revelations that the NSA was carrying out widespread spying, including listening in on including the mobile phone conversations of Chancellor Angela Merkel.
The NSA allegations were especially damaging in Germany due to sensitivity over mass state spying on citizens by the Stasi secret police in the former communist East.