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Knowledge Is Power

Eric schmidt google action press
Google chairman Eric Schmidt is interested in almost everything.
  • Why it matters

    Why it matters

    German politicians and the European Union seek greater regulation of which and how Internet searchers’ data should be used; Google is keen to keep building its market power.

  • Facts

    Facts

    • Eric Schmidt, Google’s chairman, is visiting Germany for the second time in four months; he will meet Sigmar Gabriel, the social democrat leader and economics minister.
    • Germans are concerned about data protection compared to the United States; however German users do not necessarily protect their data.
    • The European Commission is working on a data protection regulation for 2015 which would restrict how firms use data when they are dealing with customers in Europe.
  • Audio

    Audio

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It is almost a clash of civilizations, at least as far as data goes.

Today, Sigmar Gabriel will meet Eric Schmidt of Google: the former is the minister for economics and Germany’s vice chancellor from the center-left Social Democrats. The latter is the chairman of Google, the world’s biggest search engine provider.

The men represent two opposing views about the value of data and how it should be used.

Mr. Gabriel is developing guidelines about digital policy in Germany and Europe. He and other German politicians are concerned about data collection by Google and the firm’s market power. While Mr. Gabriel can’t break up the U.S. based business, he at least managed to intensify a European Commission investigation into Google.

Mr. Schmidt, formerly Google’s chief executive and now its foreign representative, is visiting Berlin for the second time in four months. At a visit to an IT firm, he tried to reassure the Germans that users can choose their search provider and that Google has to be innovate to stay ahead.

But Google has a 90 percent share of the market.

“We’re dealing with a monopolist that gathers an immense amount of data for purposes we’re not sure of,” said Andrea Vosshoff, Germany’s federal commissioner for data protection and freedom of information, in an interview with Handelsblatt.

“We’re dealing with a monopolist that gathers an immense amount of data for purposes we’re not sure of.”

Andrea Vosshoff, Federal commissioner for data protection and freedom of information

Data protection is important to Germans who have known the dangers of the abuse of information under the Nazi regime and later in communist East Germany.

“Europeans pay more attention to this topic than people in the U.S. And it’s good that people in Europe are concerned, we need this kind of vigilance,” said Larry Page, Google’s chief executive and one of its founders.

German politicians also see protecting data as a competitive advantage. “We shouldn’t underestimate the importance of this factor,” Thomas de Mazière, interior minister from the center-right Christian Democrats, told Handelsblatt. This will be included in the European Union’s data protection reform.

By 2015, European countries aim to set up new rules that will restrict how much firms such as Google, Facebook and Amazon can gather and use their users’ data.

“I won’t hesitate to stop powerful firms from making difficulties for smaller firms,” said Margrethe Vestager, the incoming European competition commissioner.

She will have to decide whether to restrict Google’s power or to accept the compromises that the firm has proposed. One such compromise is that when users search for goods, Google would show competitors’ results as well as its own, for example.

European politicians are concerned about competition and also market access. “If U.S. firms can do more with data than other firms can, they will be able to further build on their competitive advantage,” Mr. de Mazière said. Some IT firms from the United States are choosing to settle in the United Kingdom or Ireland where data protection laws are looser than in Germany.

“It doesn’t matter where firms are based in the world, as soon as they are dealing with customers in Europe, they are covered by European Law,” Ms. Vosshoff said.

The European Union plans to regulate how far firms can or are obliged to save, share and delete data. “Users should understand how their data is going to be used,” Ms. Vosshoff said.

“The data protection regulation should be completed as soon as possible and to as high a degree of quality as possible,” said Bernhard Rohleder, chairman of the industry association Bitkom.

While survey results show Germans are highly aware of the need for data protection, this does not translate into changing habits. “I would hope that people’s desire to protect their data would make this into a competitive factor,” Ms. Vosshoff said.

She is concerned because users tend to agree to data protection terms and conditions without fully understanding the implications of these nor how they can change as firms make increasing use of big data.

Ms. Vosshoff does not believe big data and data protection are necessarily opposites. “Big data means evaluating masses of data in real time; that has a lot of potential to improve many aspects of life. A lot of that information is not personal.”

Transparency is at the heart of all these concerns at a time when IT is creating opportunities but also uncertainty. Today’s meeting is one of many attempts to create a route through the new products and possibilities they bring.

Internet Giants Correct

 

Till Hoppe, Jens Koenen, Thomas Ludwig and Klaus Stratmann write about IT and politics. To contact the authors: hoppe@handelsblatt.com, koenen@handelsblatt.com, ludwig@handelsblatt.com, stratmann@handelsblatt.com.

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