Prospects on Germany's Digital Landscape in the Next Four Years: What Does the Coalition Agreement Say on Technology?

by White & Case LLP
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Following the German federal election on September 22, 2013, the Christian Democratic Party, the Christian Social Union and the Social Democratic Party decided to take up coalition talks for the formation of a new government led by the current chancellor-in-charge, Christian Democratic Union's party leader Angela Merkel. The negotiations ended with a coalition agreement (the "Coalition Agreement").1 While promptly ratified by the representatives of the Christian Democratic Party and the Christian Social Union, the Social Democratic Party decided for a ballot vote of its members over the Coalition Agreement, and reached a favorable vote on December 14, 2013. Accordingly, the Coalition Agreement was formally signed by the parties on December 16, 2013. While legally non-binding, the Coalition Agreement outlines the broad policy lines the new government will follow in the next four years, and as part of that sets the framework for Germany's future digital landscape. This article provides an outline thereto.

Digital Society
Technology and innovation are recurring key topics throughout the Coalition Agreement, which stipulates a "country with a digital culture". While this term refers in first instance to the digitalization of Germany's cultural heritage, it characterizes German technology policy in general. Digital growth is seen as a key factor for economic wealth, and the importance of a national information and communication strategy (ITK-Strategie) is highlighted. The prospective government commits to support top-level research in this field, and to foster businesses with digital technologies. This includes intelligent power supply networks (Smart Grid), E-Health, Cloud Computing and Big Data. Media literacy is seen as a key competency for all citizens.

Technology Infrastructure
Fast and secure broadband networks are seen as key for innovation, growth and employment. The Coalition Agreement commits to a strong German and European telecommunications and IT industry to answer the global commercial and security policy challenges. Key aspects include:

  • Country-wide broadband supply with at least 50 Mbit/s by 2018 through encouraging investments, reducing investment barriers and setting appropriate regulatory frameworks.
  • Boosting Wifi availability in the public space, while clarifying the legal basis of open networks (especially regarding liability), as well as supporting the development of local, decentralized networks.

Data Privacy and Data Security
The Coalition Agreement emphasizes the meaning of data privacy and data security in the digital world. Leading topics for the next four years include:

  • The government commits to further negotiate and to adopt the proposed EU General Data Protection Regulation to implement an EU-wide consistent level of data protection,2 comparable to the current German level.
  • Full national implementation of EU Directive 2006/24/EC on data retention, which sets the framework for the storage and use of data for the purpose of prevention, investigation, detection and prosecution (Vorratsdatenspeicherung), whereby the German government will work towards a three months storage period on EU level.3
  • Promotion of technologies to allow businesses profiling activities without the need to collect specific personal data. Non-anonymous profiling will be subject to narrow statutory boundaries. The use of scoring methods of businesses has to be notified to the authorities going forward.
  • Consumer protection associations shall be entitled to issue warnings for data protection law breaches and to bring actions for injunctions.
  • Better protection of the data of children and underage persons in social media through effective statutory protection, as well as amendments to the criminal laws to better protect individuals against cybermobbing, cybergrooming and phishing.
  • Creation of an IT security law with binding minimum IT security standards for critical infrastructures. It will be mandatory to notify security incidents to the Federal Office for Information Security (Bundesamt für Sicherheit in der Informationstechnik).4 The capacity of the Federal Office for Information Security will be strengthened, and all federal authorities will be obliged to invest ten percent of their IT spend in the security of their systems. Investments in end-to-end encryption technologies, an email encryption standard (DE-Mail) and other security technologies will be supported. Further, IT suppliers shall be held liable for data privacy and IT security defects of their products.
  • The European standards on consumer protection and data privacy shall be leveraged into the contemplated EU-US Free Trade Agreement.
  • The government will seek for further clarification whether and, if so, to what extent foreign intelligence services are eavesdropping on German citizens and the government. Communications and communication infrastructure shall become more secure, and European telecommunication services providers will be obliged to encrypt telecommunication connections at least within the European Union and will be prohibited to forward telecommunication data to foreign intelligence services.
  • The government will promote a European-wide notification duty for businesses that transfer customer data to authorities in non-European countries without the customer's consent, and will further urge for renegotiations of the U.S.-EU Safe Harbor Framework and the SWIFT Agreement.

While all such measures are considered emphasizing the importance of data privacy and data security, the Stifung Datenschutz, an independent agency founded in January 2013 to promote data privacy through public education, shall be integrated in the Stiftung Warentest, an independent agency generally concerned with consumer protection through product testing. This is widely seen as a "downgrade".

E-Commerce
Within the field of E-Commerce, consumer protection aspects are underscored. Mobile commerce shall be developed in a consumer-friendly way, including transparent presentation on mobile devices and the possibility to return apps.

Conclusion
In conclusion, digital growth is high on the agenda of the Coalition Agreement, and technology will continue to be a key topic in the next four years. At the same time, data privacy standards will be on the rise, and businesses are well advised to closely monitor and assess those.


1 - The Coalition Agreement has the title: "Deutschlands Zukunft gestalten – Koalitionsvertrag zwischen CDU, CSU und SPD – 18. Legislaturperiode", and is available on the webpage of the Christian Democratic Party at https://www.cdu.de/sites/default/files/media/dokumente/koalitionsvertrag.pdf (last accessed December 14, 2013).
2 - A concise overview on the topic can be found on the following sub-page of the European Commission: http://ec.europa.eu/justice/newsroom/data-protection/news/130206_en.htm (last accessed December 14, 2013).
3 - It has to be noted, however, that the Data Retention Directive is under review by the Court of Justice of the European Union in pending cases C-293/12 and C-594/12, and that Advocate General Cruz Villalón has held the Directive to be incompatible with the Charter of Fundamental Rights in his final opinion rendered (see press release of the Court of Justice of the European Union dated December 12, 2013, available at http://curia.europa.eu/jcms/upload/docs/application/pdf/2013-12/cp130157en.pdf (last accessed December 16, 2013)).
4 - English version of the webpage of the Federal Office for Information Security: https://www.bsi.bund.de/EN/Home/home_node.html (last accessed December 14, 2013).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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