His comments came after the Conservatives announced plans to introduce a Snooper's Charter if they are elected to govern following the General Election.
The charter would require internet companies to keep a record of all websites visited by every single member of the public.
Liberal Democrats are calling for future security measures to be targeted, proportionate and to not trample on civil liberties.
Simon said: "It is vital that the police and intelligence agencies are able to investigate and prosecute terrorists, including surveillance of communications. The Liberal Democrats have moved quickly in Government to plug the gaps in existing legislation to bolster these abilities.
"Future security measures must be proportionate, justified and necessary - and not trample on our civil liberties. The so-called Snoopers' Charter, which would see the internet browsing of every single citizen stored for a year, fails these very reasonable precautions.
"The idea that you protect free speech by spying on every law-abiding person in this country is a contradiction in terms. You can't have an open society if you are constantly worried that the state is prying into your daily life."
A Snooper's Charter would undermine the freedom of expression that all British citizens enjoy.
Passing a Snooper's Charter would dramatically shift the relationship between the state and the individual. It would give governments the indiscriminate power to record every individual's web history, e-mails and social media communications, irrespective of whether they are guilty or not.
Freedom of speech is a founding principle of our democracy and one which Liberal Democrats will act to protect.