Previously the state premier of the southwestern German state of Baden-Württemberg, Mr. Oettinger has served as E.U. energy commissioner since February 2010. But following his appointment as the bloc’s incoming digital czar, he has wasted little time switching to the challenges facing Europe in the Internet age.
Handelsblatt: Mr. Oettinger, the European Union is in danger of sleeping through the digital revolution. What will you do to wake the Europeans up?
Günther Oettinger: First of all, we need a delegation of responsibilities. The E.U., the national governments, states and communities must clarify who is responsible for what, and what will be done jointly. I will soon submit a recommendation along those lines.
Deutsche Telekom CEO Timotheus Höttges said, “When it comes to the digitalization of the economy, Europe clearly lost the first half of the game.” Time is short. Might clarification of responsibilities hold us back?
We are behind, that is true. But you can only lose a full game. Just by virtue of the fact that we recognize our deficiencies, means we have the chance to catch up. Deutsche Telekom plays an important role here. It has long been a strong national player, but does not have enough financial strength for the global market. We need to change that. We must make it possible, with a clever industrial policy, for our companies to be able to grow at the global level.
Chancellor Merkel thinks that competition rules hinder telecommunications companies too strongly. Do you agree?
We must not thwart collaboration and mergers in the IT industry with competition rules that are too strict.
In Europe there are only four large telecom companies. Should there be even fewer?
No. It is a question of promoting the mergers and collaboration of the many small regional IT and telecom providers. One or two large corporations could develop out of that. In Germany, Deutsche Telekom and Vodafone are very strong, but their market share in Europe is considerably smaller. The European telecommunications market in comparison with the American is too fragmented and the earnings are too weak.
Is the E.U. to blame for that?
To some extent, yes. Until now we have taken care that the consumers profit from the liberalization of the telecommunication market. In the future there should be more emphasis on making it possible for the companies to receive reasonable profits.
For example, by liberalizing network charges?
It involves all areas of state regulation, including network charges.
Will the concept already presented for a Telecoms Single Market (TSM) be changed again?
The TSM plan is currently being discussed in the Council of Ministers. I am waiting for its position and will then introduce an industry policy approach. I am curious about the reaction of the member nations.
Now to the topic of net neutrality. You are of the opinion that there should only be right-of-way on the Internet for public interests. What does that mean?
I am talking about things like disaster response or medical care.
Angela Merkel has suggested creating categories of services.
With the post office it has always been the case that one could send bulk mail, a letter or an express letter.
Those who pay more get more speed?
I am not categorically against it, but you have to be careful. If there are too many categories, then the lower end of the Internet will possibly not be reliable or available all the time. It should not get to this point of social disadvantage.
There will only be fast Internet when more is invested in the network. What are you doing along those lines?
The lion’s share of investments must come from private companies. But we must encourage this investment.
“The E.U. urgently needs to compel providers in all countries to follow uniform rules. Penalties for violations can be fines in the billions or completely blocking access to the European market.”
The new President of the E.U. Commission has announced an investment program of €300 billion. Will there be something in there for digitalization?
There is much to be said for starting a development program for digital projects at the E.U. level. We must set a goal for ourselves: When do we want to have comprehensive coverage in single digital market and with what capabilities? Then we can support projects in the border regions in order to reach this goal.
Will the E.U. also support Industry 4.0?
Industrial digitalization contains just as many great opportunities as it does risks. Digital management can make production processes more secure and lower costs. Conversely, it will be very expensive if you have to pay for digital competence on top. Then the added value will shift from industry to the IT companies. Therefore, we need to establish some competencies here. A European engineer must be able to control a factory.
Germany is working on that, but other countries are doing nothing. Are they at risk of becoming industrially irrelevant?
Countries in which industry plays an important role need a transfer of expertise. Otherwise countries such as the Czech Republic, Poland, the Baltic states and Slovakia will fall into a trap.
Are good suggestions enough?
I will only first request money if I know that there are meaningful projects that need European money. I must discuss that with Business Europe and large industrial companies. Industry 4.0, by the way, is also a challenge for German companies, especially for small to mid-sized businesses.
They are shying away from digitalization, because if their know-how is networked it could potentially be tapped by IT giants.
That is why it is all the more important that we get European data protection. Currently, the U.S. Internet companies can choose the E.U. country with the weakest national data protection and from there enter the entire European market. The E.U. therefore urgently needs to compel providers in all countries to follow uniform rules. Penalties for violations can be fines in the billions or completely blocking access to the European market.
That is what is intended with the General Data Protection Regulation. When will it be adopted?
Hopefully, next year. The German federal government wants to constructively collaborate on that.
Hasn’t Germany blocked this regulation until now?
If a country insists on its national rules one-for-one, then there will never be European regulations. The federal government has recognized that.
Can Germany keep data privacy rules that go beyond E.U. law?
You must answer that paragraph by paragraph. But overall I am rather skeptical. If all 28 countries were to issue other rules in addition to E.U. law, then it creates new divides in the single market. And companies could again go to the country with the weakest policies.
Who will be responsible for overseeing compliance with the E.U. data protection standards?
It would be logical to have a European data protection authority to enforce European standards. That way we can prevent European countries from neutralizing European data protection because they do not apply the rules strictly enough or do not have enough personnel at their agencies.
The interview was conducted by Handelsblatt’s Brussels bureau chief Ruth Berschens in Strasbourg. To contact the author: Berschens@handelsblatt.com