PublishedSeptember 26, 2013

Merkel’s Big Win – What’s in for the IT sector?

The recent federal elections in Germany were truly historical. Apart from Angela Merkel’s resounding victory the German liberals, the smaller coalition partner of the last Merkel-led government, did not pass the 5% threshold and will not be part of the newly elected Bundestag – something that has not happened to them since the foundation of today’s federal republic. Chancellor Merkel is expected to form a coalition with the Social Democrats, the second biggest party in the country which would leave the Greens and a far left party to constitute the opposition – a small and rather weak opposition.

The question that comes up at this moment in time is simple: what will be the impact of this election on the IT sector? Various considerations come into play in terms of both German internal politics and policy-making at European level.

One obvious theme is net neutrality, which causes controversies in both Germany and the EU. While still in power, the German liberals pushed for legislation that would have enshrined the principle of net neutrality into law. Former Minister for the Economy, Philipp Rösler, made strong statements in favour of the principle and instructed his ministry to come up with a draft. What will remain from this initiative is highly uncertain given that Angela Merkel’s ruling party is known to have a critical stance towards the principle.

This ties into the debate that is unfolding at European level. Arguably, Rösler’s initiative would not have been worth a lot given that the European Commission is set to regulate this issue on a pan-European level. The bigger question will be how exactly is that Regulation going to look like on European level. At that point Germany will have a say as well, and with the liberals out of power, the country’s position is set to change for the worse.

What has generally been missing in the Merkel government is a coherent strategy for the IT industries. It is quite telling that the most (in)famous law that has come out of the last government was the Leistungsschutzrecht, an ancillary copyright for press publishers subjecting online news aggregation to a license. In continuation with this bad tradition of the German government neglecting the digital economy – also one of the most vibrant sectors in Germany – the country’s position for the ‘Digital European Summit’ to take place at the end of October seems unclear at this point in time. No one knows what Germany will bring to the table which is worrying in the face of France’s proposals for stricter rules specifically targeting Internet companies.

Germany’s stance towards the digital economy is to a large degree reflective of Merkel’s response to the NSA spying revelations. In fact, there was no response and it is remarkable how irrelevant the topic was in the election campaign in a country that, due to historical reasons, is usually hypersensitive to privacy issues. That is unlikely to change under the new government given the Chancellor’s inclination to stand closer to the aims of government surveillance in the tradeoff between citizens’ privacy and security. This has not been unproblematic under the last coalition with the Liberals explaining Germany’s difficulties in e.g. implementing the data retention Directive.

It will be interesting to watch these as well as other relevant policy issues in Merkel’s ‘Grand Coalition’ that is likely to come about with the Social Democrats, especially given that Internet policies have never belonged to the core themes and competences of both parties.

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