The German data protection law starts to bite

The Deutsche Bahn has been sentenced to a penalty of 1,1 Mio Euro for breaches of the German data protection law, e.g. the privacy regulations in Germany. That is the record penalty based on the BDSG (Bundesdatenschutzgesetz), how the law formally is called. The reason for that penalty were abusive analysis of employee data, to identify potential cases of corruption and fraud. Data of bank accounts of suppliers and employees were compared. That became public, there was a lot of public discussion about - the topic was top in the news for several days. And the CEO, Hartmut Mehdorn, was (factually) fired.

However, dealing with corruption and fraud is a must for the management of any corporation. Heinrich von Pierer, the former CEO of Siemens, had to leave the company because he didn't address corruption and fraud. Hartmut Mehdorn did it - and lost as well. Obviously, there are regulations in conflict. The problem of both was that they had no valid concept of which regulations are relevant, which are in conflict and how to deal with these conflicts. The Bahn analyzed far too much data and didn't put that approach into a bigger concept, openly discussing it with the works council and so on.

So one lesson which should be learned by everyone with responsibility for compliance regulations (and the BDSG is one of them) is: Analyze the relevant regulations, clearly define the valid approach to deal with, discuss it with the works council as far as employee data is affected, talk with your auditors - in fact have a strategic approach on how to operationalize the regulations.

The second interesting aspect around the "Bahn" case is that the penalty is a record penalty - and only 1.1 million Euro, which is sort of paid out of the petty cash. Thus it hurt some people at the Bahn, loosing their jobs. But it is only a small penalty from the perspective of the large corporation. It seems that the BDSG is sort of a "law that has no teeth" (in German the saying is "toothless tiger"...). But there is good news (from the perspective of enforcing privacy and data protection): The new amendments of the BDSG will change things fundamentally - the tiger will get teeth.



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