German data storage laws ‘threaten free trade’

Germany’s data storage laws are comparable to those of Russia and China, according to a top US tech think tank. Forcing companies to store data locally hinders the global digital economy, the ITIF argues.

Germany is up there with Russia, China, Turkey, and Indonesia on a list of countries that pursue protectionist policies that damage global technological innovation, according to a leading US think tank.

The Information Technology & Innovation Foundation (ITIF) released a report this week arguing that Germany’s data storage law, which was updated in 2015 to tighten cybersecurity, was a potentially damaging hindrance to free trade.

The 2015 law change forced telecom companies to store metadata locally in Germany, rather than anywhere else – even in the European Union. This amendment “potentially violates rules that protect the freedom of services…  and the free flow of personal data” protected by EU laws, the ITIF said in its report entitled “The Worst Innovation Mercantilist Policies of 2016.”

But some German economists were skeptical. Barbara Engels, digitization specialist at the Cologne Institute for Economic Research (IWK), seemed surprised by the ITIF’s accusation. “I don’t see a problem the way this institute does,” she told DW. “I don’t really see exactly how it should hinder innovation.”