German American Business Association Your bridge to Europe - Doing business in Germany March 23 rd, 2011 Compliance in Germany – The European role model Klaus M. Brisch, LL.M. (USA)

Agenda  Why – Compliance in Germany as European role model?  Compliance and eCommerce  Examples for compliance standards –consumer protection –data protection and privacy © BridgehouseLaw Cologne, Privileged & Confidential 2

Why – Compliance in Germany as European role model? …if you can make it in Germany you can make it everywhere (in Europe)…  Extensive compliance awareness and regulation  German demands meet US compliance standards  Strong German influence on European legislation © BridgehouseLaw Cologne, Privileged & Confidential 3

“Top Down Approach” © BridgehouseLaw Cologne, Privileged & Confidential 4  Meeting German compliance standards leads to „top down“ approach quick spreading of business activities to other EU countries cost efficient most likely acceptance of products and services in other EU countries (e.g. consumer rights and privacy)  „compliance hub“ to Europe  Ideal strategic hub to start business in EU

Compliance and eCommerce © BridgehouseLaw Cologne, Privileged & Confidential 5  eCommerce in Germany is 100% European law, e.g. EU Directive on the processing of personal data and its free movement ( ) EU Directive on electronic commerce ( ) EU Directive on the common system of value added tax ( )  Transmission into national jurisdictions

A few words on eCommerce in Germany © BridgehouseLaw Cologne, Privileged & Confidential 6  Germany – home to nearly 56 million Internet users  more than 75% of German households have a broadband connection (2012: 80%)  Germany – largest connected population  Leading eCommerce market in Europe  Over 30% of all goods and services traded online in Western Europe are sold in Germany (8.6% worldwide)  Germany: By far the largest market share of any Western European country

Examples for Compliance Standards © BridgehouseLaw Cologne, Privileged & Confidential 7 A few words on –consumer protection –data protection and privacy

Consumer protection © BridgehouseLaw Cologne, Privileged & Confidential 8  Statutory information requirements T&C Description of goods and services Imprint – company information !!  Statutory right to withdraw from a contract when purchasing products via internet (at least 14 days after delivery), but exceptions !!  Insufficient descriptions, poor product presentations lead to frustration

Data Protection / Privacy © BridgehouseLaw Cologne, Privileged & Confidential 9  Since 1977: Federal Data Protection Act  1984: „Informational right of self-determination“ established by the Federal Constitutional Court („Volkszählungsurteil“)  Since 1995: „EU Privacy Directive” (strong German influence)  2011/12: EU – new legislation expected based on German standards

Public Awareness in Europe - Examples © BridgehouseLaw Cologne, Privileged & Confidential :  Google Inc. issued an apology, acknowledging it has been vacuuming up fragments of people`s online activities broadcast over public Wi-Fi networks for the past four years while expanding "Street View."  warning by the Federal government that private sector Internet companies need to be more transparent about personal data they store on Web users

German Federal Constitutional Court © BridgehouseLaw Cologne, Privileged & Confidential 11 Limitation on Phone and Data Storage (Feb. 2010)

German Federal Constitutional Court © BridgehouseLaw Cologne, Privileged & Confidential 12  Germany's Constitutional Court has rejected a controversial law requiring data on telephone calls and traffic to be stored for six months for possible use by law enforcement  Judges said that data storage was not secure enough and that it was not sufficiently clear what it would be used for

Results © BridgehouseLaw Cologne, Privileged & Confidential 13  Germany strategic hub for doing business in Europe  Competition advantage by meeting simple information reqirements (Analysis of comsumer and privacy issues)  Meeting German compliance requirements gets US companies ready for entire EU market

Many thanks for your attention! Any questions? Klaus M. Brisch, LL.M. (USA) Managing Partner © BridgehouseLaw Cologne, Privileged & Confidential 14