Economist Schnitzer on ministries and consumer protection

The economy Monika Schnitzer is amazed at the planned departmental layout of the traffic light coalition. “That surprises me indeed,” she told the Handelsblatt. Specifically, it is about responsibility for consumer protection. This was previously located in the Ministry of Justice and is now to be transferred to the Ministry of the Environment.

Of course there are points in consumer protection that concern environmental issues, so Schnitzer: “But I currently see the greatest challenges in consumer protection in the area of ​​digital markets.”

Schnitzer meanwhile praised the advances in the coalition agreement, which should ensure more competition in the economy. In particular, this applies to the break-up of large digital companies such as Google or Amazon as a last resort. “This is an important step,” explained the professor at the University of Munich. Even the threat of using this means will have a disciplinary effect on the corporations. Schnitzer thinks: “It is therefore a good thing that the traffic light has explicitly included in the coalition agreement to advocate this possibility at European level.”

Read the whole interview here:

Ms. Schnitzer, according to the coalition agreement, the traffic light wants to promote competition in the economy. Are the proposed measures sufficient for this?
In any case, you are to be welcomed. The old coalition had already pushed the topic of competition significantly. Germany is an international pioneer, for example with the ability to attest large digital corporations an outstanding cross-market position. Now the coalition wants to close further gaps, especially in the area of ​​merger control.

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In Germany there is already the possibility that the Federal Cartel Office can examine mergers of companies even though they have not yet reached a certain turnover threshold. Instead, the purchase price counts. Is not that enough?
This possibility must urgently be used across Europe and bans on so-called killer acquisitions must also become legally binding. This is what the traffic light wants to do. This is an important topic, especially in the digital economy. Young companies often have hardly any turnover, but their data and new product ideas can still pose a threat to large corporations. If large corporations absorb these, it often harms competition. The takeover of the digital bracelet manufacturer Fitbit by Google was one such case. The EU Commission did not dare to intervene because it feared that it would lose out in court with the current legal situation.

What has to happen
We urgently need to sharpen it up, especially at EU level. Above all, merger control must become more judicially sound.

What is found for the first time in the coalition agreement is the breaking up of large corporations as a last resort.
This is an important step. When digital giants such as Google, Apple or Amazon take advantage of their dominant market position, they are only given rules of conduct. But that hardly bothered these corporations, they always find a way to bypass them. For this reason, unbundling, independent of abuse, must be possible on solidified markets as a last resort. Even the threat of using this means will have a disciplinary effect on the corporations. It is therefore a good thing that the traffic light has explicitly included in the coalition agreement to advocate this possibility at European level.

The traffic light also plans to give the Federal Cartel Office options for action in the context of consumer law. What’s the point?
The Bundeskartellamt has had powers in consumer protection since 2017. It can carry out investigations and has already uncovered considerable deficits in terms of consumer law in the digital economy, in price comparison portals, user reviews or smart TVs. The problem: the officers can do no more than determine these things. So far, they have no powers to force companies to change their behavior. That could change now, and that would be an important step.

There will be a general reorganization of consumer protection. According to the coalition agreement, the issue will no longer be dealt with in the Ministry of Justice, but in the future in the Ministry of the Environment. Do you understand?
Indeed, that amazes me. Of course there are points in consumer protection that concern environmental issues. But I currently see the greatest challenges in consumer protection in the area of ​​digital markets. So far, these issues have been dealt with in the Ministry of Justice. I cannot understand the change in the department layout. But I haven’t heard an explanation yet, maybe it will come later. Actually, this should have been linked with responsibility for competition topics.

There will be no digital ministry now.
That’s right, but the Ministry of Transport is apparently no longer just supposed to deal with the digital infrastructure, but with the digital as a whole. At the same time, the competencies for digitization in the federal government are to be reorganized and bundled and there is to be an additional central digital budget. Who should be responsible for this, however, is not in the coalition agreement.

What speaks against the Ministry of Transport?
Digitization is a cross-cutting issue. This is also shown by the coalition agreement. I think many of the measures listed there make sense. A digital check for legislative proposals and your own digital budget – such big steps are urgently needed. But that has to be shown in all areas of government work. In any case, a lot of coordination work will be necessary here.

More: “The pension is the black spot in the coalition agreement”

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