On December 1, 2010, the German Federal Ministry of the Interior (the “BMI”) issued a paper entitled “Data Protection on the Internet,” which contains a draft law to protect against particularly serious violations of privacy rights online.

Regulation of Geo Data Services

The BMI’s paper was developed in context of recent discussions regarding the regulation of geo data services. A draft data protection code for geo data services (the “Code”), prepared by businesses under the leadership of the German Federal Association for Information Technology, Telecommunications and New Media (“BITKOM e.V.”), was also published on December 1, and now will be assessed by the BMI.

In its paper, the BMI rejects the adoption of a specific law to regulate services such as Google Street View. The BMI believes that, to the extent service providers implement sufficient technical and organizational measures to protect data, statutory regulation is not necessary.

Regulation of the Publication of Personal Data Online

The Ministry does, however, see a need for certain statutory rules to protect individuals from serious violations of their Persönlichkeitsrecht or “personality rights.” In particular, the paper mentions Internet services such as facial recognition, search engine profiling and location-based services based on location information. According to the paper, the publication of comprehensive data of this nature, or data that describes an individual in a defamatory way, should be published online or made publicly available only if (1) there is a legal justification for the publication, (2) the individual in question consents to the publication, or (3) there is an overriding policy interest in publication of the data.

New Right to Claim Immaterial Damages

For violations of this rule, the draft law suggests the implementation of a new right to claim “immaterial damages” to further deter violations. The penalty should equal the amount of the actual or expected profits by the company, thereby removing financial incentives to violate the law.

The Ministry’s objective is to promote self-regulation of Internet applications, and to avoid enacting laws that might stifle useful and necessary innovation. The Internet is viewed as a “public space” that should, in principle, be free of state restrictions.