Germany advocates creation of internet regulator

Letter sent to the Commission by the German government sets out a tough line on Google and other internet platforms.

Europe needs to ensure that dominant internet firms do not stifle competition while taking advantage of investments made by European telecoms firms and dodging European taxes. That is the message set out by the German government in a private letter sent to the European Commission.

The letter, sent in mid-November, shows how much the German government has toughened its stance towards internet governance in the wake of complaints by German companies that they are being treated unfairly by Google, and revelations that the authorities in the United States used the internet to spy on European citizens and EU leaders.

The remarkably bold letter – signed by Sigmar Gabriel, Germany’s vice-chancellor, Thomas de Maizière, the minister of the interior, Heiko Mazwas, the minister for justice and consumer protection, and Alexander Dobrindt, the minister for transport and digital infrastructure – was sent just days before the European Parliament backed a non-binding resolution calling on the Commission to consider breaking up Google.

The letter advocates the need for “regulatory provisions applying to dominant platforms that tie in with antitrust laws and extend beyond the obligations these laws contain”.

It suggests that such a law – which could take the form of a provision specific to the internet – should require dominant platforms to be “neutral” and open to all. They should also be required to present rival services for free.

Furthermore, the German government advocates the creation of “independent government institutions” to investigate complaints against search engines, and suggests that the Commission amend its merger rules to give greater importance to data when assessing the market power of merging firms.

Such provisions would go a long way to remedying concerns expressed by Google’s rivals, which include Microsoft, Bertelsmann, Allegro and a host of smaller websites specialising in travel, maps and e-commerce. The Commission’s antitrust investigation into the claims has so far accepted some but not all of the charges.

The German letter is addressed to, among others, Margrethe Vestager, the European commissioner for competition, who is leading the probe into Google. The outcome of the Commission investigation, says the letter, “is of far-reaching significance”. Several US politicians complained last week about what they described as the politicisation of the antitrust investigation into Google.

The German letter appears to back the preliminary conclusions of the Commission’s four-year-old probe into Google. However, the German government has already concluded that EU competition law will be unable to rectify all the competition issues posed by online platforms.

The letter also positions the German government clearly on the side of incumbent telecoms operators in their dispute with internet companies, known in this context as ‘over-the-top providers’.

“Major digital companies generating high income in the European Union and using third-party infrastructure to do so should no longer have an unfair competitive advantage over enterprises who adequately pay their taxes, and should not be allowed to continue to evade their obligations to contribute to financing the community,” it says.

The letter continues: “We emphatically support a strict application of the European subsidy rules targeted against special tax deals such as in the case of Apple, and against the selective preferential treatment of certain enterprises.”

The German government also restates its wish for high standards on data protection. It argues that the draft data-protection regulation, which will be discussed by EU home affairs ministers on Thursday and Friday (4-5 December), should include a specific provision on “profiling” by internet companies and that all companies operating in the EU should be subject to EU rules.

This is needed because of the “widely diverging data-protection standards applying in Europe and in the US”, says the letter.

It also calls on the Commission to bring forward proposals to make the “necessary adjustments to copyright law to bring it in line with digital developments”.

A joint paper presented by the French and German telecoms ministers on Thursday (27 November) called on the Commission to launch a public consultation on the possibility of specific regulation for internet platforms.

“We welcome the support of the French and German governments to a fully functional digital single market and we will look carefully into their suggestions,” said a Commission official.

 

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