How changes to Germany’s Federal Registry Law are affecting business

A new empirical study led by Hertie School Professor of Public and Financial Management Gerhard Hammerschmid provides insights into the business impact of changes to Germany’s Federal Registry Law.

The controversial 2015 changes were made as access to civil registries is becoming increasingly automated through digitalisation. Businesses are allowed to request information about individuals, such as addresses, from civil registries to manage their customer data. But the revisions to the law limit the kind of information they can request from the municipal authorities, where every person in Germany is required to register when they take up residence in a new location.

The empirical study carried out in cooperation with the Public Governance Institute in Germany (Institut für den Öffentlichen Sektor) examines a dataset of over a million anonymized business requests from civil registries in the period 2014 to 2017 by a market leader in commercial services. The evaluation was accompanied by qualitative interviews with experts and the analysis of the fee structures of all German federal states.

The results not only show how quality indicators such as hit rates or processing times vary over time, but also offer conclusions about fee developments. In addition, the study offers insights into whether the changes to the law have helped to standardise information practices that were previously heterogeneous at the local level. And it looks into the actual purposes of inquiries, which was the subject of controversial public debate when the law was being drafted.

According to Gerhard Hammerschmid “One of the striking results of the study was the rather low progress of digitalizing civil registry requests for businesses. We also found evidence contrary to the law´s intention to harmonize the registry system across the states heterogeneity is still high, with substantial variations in the fees charged by the different states for the same services.”

The Federal Registry Law governs how personal data in municipal civil registries are handled – information about individuals that companies can request to manage their customer data. Since the new law came into effect, companies – or even other government agencies – can no longer obtain certain detailed information, such as whether a person is or is not registered in the civil registry, but, for example, resides instead in a correctional facility. Companies also have to specify the purpose of their request, to prevent data being used for advertising or other commercial purposes.

Read the summary of the study (in German) here.

Read a story in the German daily Handelsblatt about the study.