City tap water can have no confirmed E.coli or fecal coliform bacteria. FDA bottled water rules include no such prohibition (a certain amount of any type of coliform bacteria is allowed in bottled water).
City tap water, from surface water, must be filtered and disinfected. In contrast, there are no federal filtration or disinfection requirements for bottled water.
Most cities using surface water have had to test for Cryptosporidium or Giardia, two common water pathogens, that can cause diarrhea and other intestinal problems, yet bottled water companies do not have to do this.
City tap water must meet standards for certain important toxic or cancer-causing chemicals, such as phthalate (a chemical that can leach from plastic, including plastic bottles); some in the industry persuaded FDA to exempt bottled water from the regulations regarding these chemicals.
City water systems must issue annual "right to know" reports, telling consumers what is in their water. Bottlers successfully killed a "right to know" requirement for bottled water.