She said the true cost of corruption was "probably much higher" than 120bn.
Three-quarters of Europeans surveyed for the Commission study said that corruption was widespread, and more than half said the level had increased.
"The extent of the problem in Europe is breathtaking, although Sweden is among the countries with the least problems," Ms Malmstroem wrote in Sweden's Goeteborgs-Posten daily.
The cost to the EU economy is equivalent to the bloc's annual budget.
For the report the Commission studied corruption in all 28 EU member states. The Commission says it is the first time it has done such a survey.
What is interesting is that the report did not include a chapter assessing corruption within the EU Commission and other EU institutions. There were plans to include such a chapter, but - surprise, surprise - they were dropped!
No wonder then that European Ombudsman Emily O'Reilly demanded in a statement, that the EU institutions should be included in the next corruption report. However, it is highly unlikely that the overpaid eurocrats in Brussels will agree.
I don't think Cecilia Malmström is correct when she describes these findings as "breathtaking". I'm sure nobody is even surprised.
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