Is Data Retention Without Compensation Unconstitutional?

The Association of the German Internet Industry, eco e.V., points to a decision issued yesterday by the Berlin Administrative Court that raises the fundamental question of whether the state may compel companies to implement surveillance measures without compensating them.

Archive notice: This article was originally published on July 7, 2008. Links and embedded videos are preserved as part of the historical record.

The ruling of July 2, 2008 (case no. VG 27 A 3.07) concerned the obligation introduced through the 2005 amendment of the Telecommunications Surveillance Ordinance, requiring companies to install, at their own expense, technology for monitoring international telephone calls (known as international gateway surveillance). In the opinion of the Berlin Administrative Court, this is incompatible with Germany’s Basic Law. The court therefore suspended the telecommunications provider’s proceedings and referred the matter to the Federal Constitutional Court for a decision.

Oliver Süme, eco’s board member for law and regulation, commented: “The case involving the introduction of data retention is very similar. Here, as with international gateway surveillance, companies are being forced to spend hundreds of millions of euros to purchase data-retention technology. This technology serves state interests alone, and no compensation for its acquisition and operating costs has yet been provided. For many thousands of internet-industry providers, particularly smaller ones, these costs are a major problem and may even threaten their existence. The federal government must act now. If data retention is as indispensable to our security as is repeatedly claimed, it cannot risk the law being declared unconstitutional because it lacks compensation provisions.”

The Berlin Administrative Court considers compelling the claimant telecommunications company, without compensation, to assume the inherently sovereign task of monitoring telecommunications for criminal-law enforcement to be a disproportionate interference with its fundamental right to freely practise an occupation under Article 12 of the Basic Law and its right to property under Article 14. As a provider of telecommunications services, the claimant had no particular factual connection or responsibility in relation to criminal offences potentially prepared through telecommunications. Surveillance was also a task alien to the claimant’s corporate purpose. On the contrary, under Article 10 of the Basic Law, the claimant was constitutionally required to make its customers’ telecommunications confidential and secure against interception.