Client Alert

2021 to 2025: The New German Government’s Agenda for Digital Regulatory Compliance

10 Dec 2021
Key Takeaways: All things digital are high on the agenda of the new German government. Its coalition agreement is full of “digital” plans across numerous policy areas. However, while the agreement sets out broad plans and announces substantial reviews of existing legal frameworks, it lacks concrete measures in many areas. At the same time, the field of digital regulatory compliance is increasingly governed by binding rules at the European level that will further restrict the room for national initiatives going forward. Nonetheless, if the new government sticks to its plans, market participants should expect significant changes to the relevant legal frameworks for digital regulatory compliance over the next four years.

 

On December 7, 2021, the new German government signed its coalition agreement for the 2021 to 2025 tenure. The agreement sets the policy agenda for the new government, consisting of Social Democrats, Greens, and Liberals, and led by Olaf Scholz as chancellor. The new government took office on December 8. A key responsibility for digitalization will lie with the new minister for digital affairs and infrastructure, Volker Wissing (Liberal party), but the coalition’s plans will affect many other policy domains as well:

Digital society

Germany

  • The new government wants to amend the legal framework for online services. This includes the Telemedia Act (the German implementation of the EU’s e-Commerce Directive) and the Network Enforcement Act (the legal framework for social networks to deal with illegal online content). This will entail the installation of “platform councils” but no general monitoring obligations or measures to scan private communication, and user obligations to disclose their real name. It is unclear, however, how these plans will relate to the changes that will become necessary to these German statutes once the EU’s Digital Services Act enters into force (see below).
  • The coalition agreement suggests a new “Act Against Digital Violence”, which will aim toward reducing legal obstacles for victims of digital violence, e.g., by closing gaps regarding the access to information, creating a legal framework for electronic private enforcement, and implementing court-ordered blocking of perpetrators’ accounts.

Europe

  • When finalizing the Digital Services Act (DSA) at the EU level, the new German government wants to safeguard freedoms of communication, strong user rights, clear reporting procedures, access to data of large platforms for research purposes, the verifiability of their algorithmic systems, and clear rules against disinformation.
  • The coalition also wants to ensure that forthcoming EU legislation, i.e., the DSA, the Digital Markets Act (DMA), and the planned Media Freedom Act, sufficiently considers media pluralism and diversity in addition to independent supervision and regulation.

Consumer protection

Germany

  • As part of the coalition’s plans to ensure that products are “sustainable by design”, manufacturers will be obliged to provide software updates during the entire normal period of use.
  • The new government wants to enhance the role of competition law and of the Federal Cartel Office (Bundeskartellamt, FCO) in the area of consumer protection. It plans to assess how to strengthen the FCO to combat significant, continuous, and repeated infringements of consumer protection rules using the same means that are currently available for sanctioning competition law infringements.

Europe

  • At the EU level, the new German government wants to implement an electronic withdrawal button. This could mirror the rules for an electronic termination button that were recently adopted nationally across Germany.
  • In addition, there will be EU-wide obligations to inform consumers of the average monthly price of subscription agreements, and to offer options to conclude such agreements for a maximum term of one year.

Digital economy

Germany

  • The coalition agreement suggests strengthening the FCO’s powers to deal with digital platforms. This was already a key topic for the most recent reform of German competition law where the previous government created special rules against digital platforms as “undertakings with paramount significance for competition across markets” (UPSCAM). The coalition agreement is unclear whether, by further “strengthening” the FCO in this respect, it envisions yet another set of substantive rules governing digital platforms, or instead only procedural measures to help the FCO to apply existing law.

Europe

  • At the EU level, the new German government wants to promote an option to unbundle vertically integrated companies regardless of any alleged abuse of market power as a last resort to act on consolidated markets. It also supports the enactment of an “ambitious” DMA that must not fall below the level of existing national rules. The coalition further promotes the enforcement of the DMA by Member State competition authorities.

Digital infrastructure

Regarding digital infrastructure, and in addition to far-reaching plans to move the rollout of fiber and 5G networks forward, the coalition aims to preserve net neutrality – but without disclosing any further specifics. It thus remains to be seen whether this will lead to any specific initiatives.

Media & copyright

  • The coalition wants to achieve a greater coherence of media legislation at the EU, federal, and state levels and to revise the existing rules, also by setting up a federal/state working group.
  • In the light of the digital transformation of the media landscape, the coalition plans to implement fair regulation for platforms and intermediaries to ensure a communicative level playing field. This likely aims at protecting the interests of traditional media and publishers as they make their content available on third-party intermediary services.
  • Regarding copyrights, the coalition wants to aim for a fair balancing of interests and wants to improve the commercial situation for creative and journalistic content, including in digital markets. In addition, the new government plans to evaluate whether the recently-implemented copyright reform is actually fit for practice, particularly regarding the effects that automated processes may have on freedom of information and expression.
  • The coalition aims to revise the rules for funding of films and games. The new film funding rules could include measures such as enhanced investment obligations and tax incentives.
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