Germany: Majority Unaware of Their Digital Rights
A new study warns that efforts to reduce bureaucracy may fail due to a lack of information among the population. The representative survey conducted by the Institute has found that the majority of adults in Germany are unaware of new legal provisions allowing them to dispense with handwritten signatures in everyday transactions. However, some segments of the population are systematically better informed.
The study examined two everyday scenarios in which the legislator has abolished the requirement for a handwritten signature (written form requirement). This allows for further digitalization of business processes and cost savings. However, the study documents that the new regulations are hardly known, even though some of the legal changes were made ten years ago. As a result, the German population is missing out on considerable digitalization potential.
Consent to Data Processing
According to the General Data Protection Regulation (GDPR), which has been in force in Germany since 2018, declarations of consent no longer need to be signed by hand. Under the old Federal Data Protection Act (BDSG), this was still necessary, as it required the written form. The GDPR only requires that consent be documented.
The survey asked: "Do you have to sign a data processing consent form for it to be legally binding?" The correct answer is "No".
However, around 50% of respondents answered incorrectly: A third said "Yes", 19% "I don't know". The analysis shows that certain population groups are systematically less well informed. These include people without a high school diploma, those with low incomes, those with children, those with a migrant background, and women. People in the northeastern Federal States (Brandenburg, Mecklenburg-Western Pomerania, and Saxony-Anhalt) are also less well informed than people in the reference region of Baden-Württemberg. This applies even when the effects of high school graduation, income, etc. are taken into account. No statistically significant correlation was found with regard to age.
Lack of knowledge is detrimental to digitalization and innovation. Companies, doctors' offices, nursery schools, etc. could, for example, refrain from collecting consent forms digitally (e.g., by email). As a result, people unnecessarily cling to analog solutions on paper, which leads to discontent among consumers and extra costs for companies. Against the backdrop of the current debate on reforming data protection law at the EU level, it is clear that public awareness must become a central aspect of the legal policy debate. Without knowledge, simplifications and streamlining of data protection law will not achieve their intended purpose.
Cancellation of Newspaper Subscriptions and Mobile Phone Contracts
Already in 2016, a reform of the German Civil Code (BGB) abolished the written form requirement for a number of contracts. Specifically, this means that clauses requiring the written form are invalid. Instead, it is legally possible to cancel newspaper subscriptions and mobile phone contracts by email, for example, even without a scanned signature.
The survey question was: "Which of the following contracts can be terminated by email?" There were two possible answers: newspaper subscriptions and mobile phone contracts. The correct answer for both is "Yes".
Around 30% of respondents answered incorrectly. Regarding newspaper subscriptions, 11% answered "No", for mobile phone contracts 16.5% answered "No". In both categories, 16.6% answered "I don't know". Here, too, certain population groups are systematically less well informed. These include people without a high school diploma, those with low household incomes, people with a migrant background, people who live in cities, and those who do not follow new trends and developments. People under 40 are also less likely to know that mobile phone contracts can be canceled by email. Compared to similar people in the reference region of Baden-Württemberg, people in North Rhine-Westphalia or in the central German states (Saxony and Thuringia) are systematically better informed. Among professionals, people with a legal background in particular were more likely to give incorrect answers.
There is a risk that consumers will not exercise their rights and will incur higher costs when terminating contracts by sending letters. It is also possible that they will refrain from terminating their contracts altogether because they consider the costs of termination to be too high. Thus, lack of knowledge is detrimental to overall economic welfare. Since handwritten notices of termination remain valid, companies must accept them, which also results in higher administrative costs for them.
Need for Action
The authors consider it problematic that legislators generally refrain from launching information campaigns when changes are made to legislation governing the private sector. It is assumed that it is sufficient for one of the two contracting parties to be better informed and for the other to be disciplined by the courts if necessary. However, service providers have no incentive to inform their customers about simplifications, particularly in the case of terminations.
To achieve positive effects, the authors recommend targeted information campaigns, such as those commonly used in the U.S. The fact that the technology itself can also contribute to this is part of the Institute's ongoing research.
