Issue Brief No. 02/2009

Federal Data Protection Act to be amended

The News

The German Bundestag is currently debating an amendment of the federal data protection act. The coalition government of Christian-Democrats and Social-Democrats aims to curb data abuse and to protect citizens from unwanted data trafficking, e.g. in connection with advertising activities. In view of the latest scandals of data abuse by leading German companies, which were covered quite extensively by the media, the amendment should now include an extra paragraph on protection of data privacy of employees. At present, however, it is still unclear whether the proposal for an amendment should be included in the federal data protection act or whether it should be subject of a separate act.

The Background

On 10 December 2008, based on a draft law of Federal Minister of the Interior Wolfgang Schäuble (Christian Democrats), the Federal Cabinet decided to amend the data protection act which had been in effect since 1978. The amendment had been developed in view of technological developments and the significant rise in the number of stored data records. Another reason, however, were various data abuse scandals which lead to a profound debate whether the existing law is still meets modern requirements.

The amendment eliminates the so-called “list-privilege”, i.e. the right to exchange and forward personal data compiled in a list for opinion research and marketing purposes. Instead, it is now mandatory to obtain a person’s consent before using his or her personal data. Until now, the industry had been able to use the data if the person did not specifically disagree to this procedure. The planned amendment, however, requests companies to obtain an explicit consent (“opt-in”). This method is subject to controversial debate because it would deprive many branches of the possibility to contact potential new customers. For that reason, the coalition government ponders whether to exclude particular branches like publishing companies, insurance industries as well as market and opinion research institutes.

Another novelty envisaged in the amendment is a ban on “package deals”: Market-dominating companies are henceforth not allowed to make a contract conditional on the customer's consent to the use of their personal data. This would, of course, exclude data that are indispensable for the conclusion of a possible contract. Furthermore, the violation of the law is to be punished by higher fines.

The coalition government also wants companies to encode stored customer data. According to the home affairs spokesman of the Social Democratic Party (SPD) in the Bundestag, Dieter Wiefelspütz, this would be an effective way to prevent data misuse in the future.

In addition to that, it is also planned to introduce a voluntary data protection auditing process. Companies adhering to previously set standards are to receive a certificate.

During a public hearing in the Committee on Internal Affairs of the German Bundestag on 23 March, industry representatives voiced grave concerns over the government’s draft. The most critical point is the planned restrictions in the field of direct marketing. Consumer rights associations, on the other hand, consider the amendment to be the “right signal” which would grant more rights to the consumer.

The Milestones

Owing to differences between the coalition partners with regard to contents, the proposal for an amendment was discussed neither in the Committee on Internal Affairs nor in the plenary meeting of the Bundestag, which were due to take place at the end of April. The Committee on Labour and Social Affairs will hold a public hearing on protection of data privacy of employees on 11 May. On this occasion it will be discussed whether the proposals for data privacy of employees could be implemented into the federal data protection act.

In view of the few remaining weeks in which Parliament is sitting, however, it is uncertain that there will be a consensus concerning an amendment of the act before the end of the legislative term.


Last Update: 5 Mai 2009