German Government Proposes Tough New Data Protection Law

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WIESBADEN, Germany - The German government has issued the draft for a data protection law that is much tougher than the guidelines laid down in the EU's privacy directive. If enacted, it could severely damage Germany's DM industry.


All 15 EU member states were to have enacted the data protection directive into national law by last Oct. 24, but only a handful have done so. France and Germany are among the laggards.


The Germans are anxious to make up for lost time. They have asked for comment from interested parties that include DDV - the German DMA - the mail-order association and the German Post Office, all of which oppose the draft.


The legislation is slated to go to the cabinet in October and then to the Bundestag, the lower house of the German parliament, and to the Bundesrat, the upper house, for approval.


DDV expects it to become law in the first half of next year unless the strenuous lobbying effort now under way can change the legislation's more threatening features.


"What we can't live with," said Hans Juergen Schaefer, the DDV's legal affairs director, "is a provision demanding that the source of every name in a database be printed on the envelope."


It is one thing, he noted, to provide that information to anyone who asks for it, the practice in current German data protection law, but quite another to put it on every envelope sent out in a mailing.


"We see clear danger for business and consumers in this law. For consumers, the whole concept of data protection is turned upside down since anybody who glances at the mailing - postman, neighbor, whoever - will know the source of the address. And that's something not every consumer wants others to know - where he banks, for example, to what charity he contributes, or that he bought product from erotic or hard-core publishers."


For direct marketers, the new law would lead to a prohibitive increase in postal costs since mailings could no longer be sent out as bulk mail, which has a much lower rate.


German postal law demands the same content in every envelope of a mailing if bulk rates are to apply. "You can't put source X on one envelope and source Y on another and still get the lower rate," Schaefer said.


German mailers would be forced to look for other ways of moving their direct mail, most likely by moving production and mailing to neighboring countries.


But mailing and production abroad is still costly, which could cut into direct mail volumes. In addition, the law could lead to the elimination of 100,000 of the 1 million DM jobs in Germany, a sizeable blow given Germany's unemployment rate of more than 10 percent.


The law was drafted by the Ministry of Interior and drew heavily on an earlier version the Green party produced several years ago when it was still an opposition party, giving the bill no chance of passage. But the Greens are now partners of the ruling Social Democrats in a coalition government and have much more clout.


Moreover, Schaefer said, the new data protection commissioner, elected by the Bundestag, doesn't like DM. "He was always more interested in expanding consumer rights and brushing business interests under the rug. Germany doesn't need a new data protection law. The one adopted in 1991 is tough enough."
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