Sigmar Gabriel : Political consequences of the Google debate

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In favour of a new economic policy

Secondly: Economic policies are currently facing the vital challenge of “updating” the social market system to meet the requirements of the digital age. Fundamental elements of this system are at stake: the doctrines of freedom of contract and free competition threaten to become an illusion where the disparity between the economic objects takes on absurd dimensions, when monopolists with new kind of feudal arrogance try to evade the rule of law and refuse to provide important information. The classical concept of ownership starts to crumble when free offers destroy markets firmly based on the payment of goods or when unlawful copying and unauthorised access to content expropriate the copyright holder. Regulatory processes are therefore needed when unregulated markets and self-indulgent market actors threaten to cause considerable damage yet a second time in the wake of the financial market crisis.

These regulations are not a hindrance, they might even prove to be a breakthrough for new economic creativity. In the era of “information capitalism”, in which data become the new golden standard, data security will become a locational factor. I am certain that we in Germany and Europe have the scientific inventiveness and the political and economic innovative strength to make self-determination, security and decent jobs our trademarks in the age of the digital economy. Here we must give special support to SMEs, assisting them with their digitisation processes. We are striving for IT security legislation that obliges both companies and the state alike to implement enhanced protective measures. This could trigger off new investments and expand the market for Internet security.

Finally: The Ministry of Economic Affairs and the Federal Cartel Office are examining whether a company such as Google is not abusing its dominant market position by systematically driving out its competitors and dominating an “essential facility”. We must give serious thought to the possibility of “unbundling” the Internet market, in a similar way to the electricity and gas networks. But this should be the ultima ratio. And so, to start with, we are thinking about regulating Internet platforms by means of regulatory tools similar to anti-trust legislation. The crucial issue here is how to enforce non-discrimination of alternative providers who find innovative ways of challenging the “top dogs”.

Prevention of taxation dumping

Thirdly: We need to put up a stop sign for taxation dumping. Minimum taxation throughout Europe is an issue for competition watchdogs in the digital age. It is clearly unacceptable when Internet traders radically avoid taxation by deliberately transferring their revenue to tax havens and countries offering rock-bottom tax rates, while ordinary local retailers who keep to the rules go to the dogs.  Apple has exploited methods such as these to reduce its tax paid on earnings abroad to one percent, Google to three percent and Amazon to five percent. Europe must tackle such practices more firmly  and realise that this is an act of solidarity. In the digital economy, we have to ensure that the site where added value is generated again corresponds to the site of taxation.

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