Energy sanctions + Swiss commodity trade • Table.Briefings

Dear reader,

With drastic words, Latvian Prime Minister Krisjanis Karins yesterday called for even tougher sanctions against Russia: “We must not only isolate Putin’s economy, but cripple it.” However, at the informal summit of 27 heads of state and government, there was no majority in favor of stopping oil and gas imports from Russia, as Stephan Israel reports from Versailles. The EU Commission is now to present proposals on how Europe can end its dependence on Russian energy sources as early as 2027 and how it can respond to the enormously high energy prices. This could include a price cap. However, Germany and other countries have so far rejected this very expensive option.

Even Switzerland, whose highest principles include foreign policy neutrality, has adopted Western sanctions against Russia, albeit under pressure from Washington. Since then, the understanding of neutrality has been debated in the country, but in view of the clear situation under international law, standing aside would possibly have been the actual breach of neutrality.

With regard to the Digital Services Act, which is currently in the trilogue, the question currently arises as to who will be responsible for enforcing the rules. The state media authorities see this task as their own, since the federal system is the only way to ensure the necessary state neutrality, says Tobias Schmid, Director of the State Media Authority of North Rhine-Westphalia and European Commissioner of the Directors’ Conference of the Media Authorities (DLM), in an interview with Torsten Kleinz.

Your
Lisa-Martina Klein

EU Summit: no majority for energy sanctions

The setting could not have been more symbolic, the contrast to the seriousness of the situation could hardly have been greater. Emmanuel Macron received the EU heads of state and government yesterday for the two-day informal summit at the Palace of Versailles. Against the backdrop of Russia’s war of aggression on Ukraine, the French president called for unity and strength.

The focus here was on how the EU can reduce its dependence on Russian energy sources, strengthen its defense capabilities and make the economy more resilient. It is possible that Vladimir Putin will use gas supplies as a weapon, Macron warned in the evening. Europe is dependent and vulnerable here. The EU must prepare for all scenarios.

Latvian Prime Minister Krisjanis Karins was among those who also publicly pleaded for a faster pace on sanctions: “We must not only isolate Putin’s economy, but cripple it.” The EU must exclude all Russian banks from the payment service provider Swift and stop the import of oil and gas. Only in this way could Putin be forced to the negotiating table and the war stopped.

According to diplomats, the other two Baltic states and Poland are calling for a hard line. There was also encouragement from EU Parliament President Roberta Metsola: “In these moments of crisis, we must remember that energy is political and always has been.” The summit statement said the EU was “determined to further increase pressure on Russia and Belarus.” It said it remains ready to quickly impose further sanctions.

Commission to present proposals

Is Germany coming under pressure again after the tug-of-war over Nordstream 2? Asked whether he ruled out a gas import freeze, Chancellor Olaf Scholz gave an evasive answer, saying that very precise sanctions had been laid down in recent weeks, with export and import restrictions as well as massive measures in the financial and economic spheres. These had had a massive impact and would continue to do so. According to diplomats, supporters of energy sanctions were in the minority at the summit.

The recent announcement by EU Commission President Ursula von der Leyen to reduce dependence on Russian gas and oil by two-thirds as early as this year met with support. According to the original proposal, the EU was also to manage entirely without energy from Russia by 2030. Now the target is to be reached as early as 2027. Ursula von der Leyen announced on Twitter that she had been instructed by the heads of state and government to present a proposal with the earlier phase-out date by mid-May.

Another topic was the rising prices for energy: “We must protect our citizens and companies,” said Macron. And he pointed out that France had already had a price cap in place since last year. If prices continue to rise, however, permanent and European solutions will be needed. He added that the Commission would be given a mandate to this effect.

Price cap as an option

Von der Leyen confirmed via Twitter that she would present options for emergency measures by the end of March and explicitly mentioned temporary price limits as a possibility. The aim is to limit the “contagion effects” between rising gas prices and those for electricity.

Germany, together with other member states such as the Netherlands, is also one of the brakemen here, having so far rejected changes to the market design. The discussion about energy price caps will continue, diplomats said on the sidelines of the summit. No convincing models have been presented so far, they said. It is difficult to justify indirectly subsidizing all energy consumers with price caps, rather than just companies and households that are particularly burdened, they said. In France, the various support measures have so far burdened the national budget to the tune of around €20 billion.

The Commission President also announced that she would present options by the end of May to improve the design of the electricity market with a view to reducing CO₂ emissions. In addition, Ursula von der Leyen wants to relax state aid law to allow compensation payments to industries that are particularly affected by the price shock. At the same time, the Commission’s communication provides that unexpected profits of energy companies can be additionally taxed. Owners of gas storage facilities are also to be required to fill their storage facilities to 90 percent by October 1.

The Palace of Versailles was designated as the venue for the informal summit long before Russia’s attack on Ukraine, diplomats said. Emmanuel Macron is hosting the meeting because France currently holds the EU presidency. For the president, it’s also an opportunity to make his mark as a statesman in front of his countrymen before his re-election in April. The meeting was supposed to have been about Europe’s economic model for the future and the question of strategic autonomy. Now Vladimir Putin was the elephant in the room at the Palace of Versailles.

No rapid EU accession of Ukraine

Macron recalled that in better times he had once also received the Russian president in the historic walls. Nothing justifies starting a war, the French president said. Addressing the situation in the besieged city of Mariupol, he accused Vladimir Putin of waging a war whose goal is to kill civilians, especially women and children. There will be no solution in the coming hours and days, Macron said pessimistically, with a view to a ceasefire.

For the French president, Europe’s “strategic sovereignty” is a core concern that he now wants to accelerate, even against the backdrop of the Russian war of aggression. For some in the club, this sometimes happens too quickly. The French idea for a new defense fund, for example, met with little approval in the run-up to the summit. The topic is likely to be discussed today on the second day of the summit when Eurogroup head Paschal Donohoe and ECB chief Christine Lagarde will also join the meeting.

According to French hopes, the EU Commission should raise funds in the amount of €200 billion, similar to the COVID-19 Reconstruction Fund, and use them to co-finance joint armament projects of the member states, for example. The critics argue that the funds from the €750 billion COVID-19 Reconstruction Fund have not even begun to be exhausted.

However, there are also differences of opinion on the question of how the EU should deal with the membership applications of Ukraine, Georgia, and Moldova. Eastern European member states have so far urged in vain that Ukraine at least be quickly granted candidate status as an act of solidarity. Accession negotiations are a lengthy process and not for a country at war, the majority said. “Nobody can join the EU overnight,” Croatian Prime Minister Andrej Plenkovic said after the discussion.

Ukraine already has an association agreement, but the possibilities there have not yet been exhausted. The country could participate in a number of additional EU programs, government members could be regularly invited to ministerial meetings in Brussels. “Ukraine is part of our European family,” the final declaration reads. Stephan Israel

Russian raw materials: pressure on Switzerland increases

Even neutral Switzerland supports the EU sanctions against Russian oligarchs, authorities and companies, Ukrainian President Volodymyr Zelensky congratulated last week. He said no one could remain neutral in the face of Russia’s war of aggression. The special praise came after the Swiss government first hesitated and then, after massive pressure from Washington and Brussels, fully endorsed the EU’s punitive measures.

Since then, a discussion has begun in Switzerland about the importance of neutrality. At the same time, a discreet but extremely lucrative industry has come into focus. Indeed, according to Swiss authorities, about 80 percent of Russia’s commodity trade is conducted in Geneva, Zug, Lugano, and Zurich. So far, the EU has exempted all oil and gas trade from its sanctions. However, this could soon change after the USA has submitted here.

Switzerland could therefore quickly find itself in a tight spot again and also be confronted with unpleasant questions: How is it that business with raw materials from Russia is conducted almost exclusively via Switzerland? It cannot be due to the beautiful mountains alone.

Public Eye, a non-governmental organization based in Bern, has been targeting the industry for some time. At stake are 500 companies with fewer than 5,000 employees. According to Oliver Classen of Public Eye, a bundle of reasons has caused the concentration. A key role is played by the “favorable regulatory climate”, i.e. the low due diligence requirements when it comes to combating money laundering and corruption.

Warning against damage to reputation

Added to this are the low taxes, the favorable financing opportunities in the Swiss banking center, the political stability and, of course, a certain clustering. In Geneva, companies such as Gunvor and Trafigura concentrate their business with Russian oil, while Gazprom trades in gas from Zug. With the exception of gold, hardly any of the commodities ever come to Switzerland. Oliver Classen speaks of transit trade. The traders in Switzerland sit at their computers and organize the business between Russia and buyers worldwide.

Thanks to the sale of oil and gas, around 30 billion dollars a month flow to Russia, largely via Switzerland, and fill Vladimir Putin’s war chests there. Non-governmental organizations such as Public Eye have been warning for years that Switzerland could suffer similar reputational damage in commodities trading as it once did with banking secrecy.

Switzerland is a dominant trading center not only for Russian oil and gas, but also for resource-rich and traditionally corruption-prone countries in Africa. Switzerland once had to give up banking secrecy after tough resistance from politics and business under pressure from Washington and Brussels. The Swiss financial center also had to accept strict rules against money laundering. Since then, Swiss banks have been practicing their so-called white money strategy, at least toward clients from industrialized countries.

Commodity market hardly regulated

Unlike the financial market, the commodities market is still hardly regulated today. The deficit is exacerbated by the fact that commodity trading and commodity extraction are increasingly merging. Some of the Swiss trading houses, such as Glencore, are no longer pure traders and have expanded their activities along the value chains. This also multiplies the vulnerability to corruption and threats to Switzerland’s reputation.

In a 2018 country assessment of Switzerland, for example, the OECD stated that commodity trading posed particularly high risks. This, it said, was due to the very high profit opportunities, the lack of transparency around sales, and the absence of international standards for these transactions. The OECD called on Switzerland to take stronger law enforcement measures as well as measures to prevent cross-border corruption.

With this in mind, Public Eye is also urging the Swiss government to establish a commodity market regulator similar to the financial market regulator. This supervisory authority would have to ensure that companies conduct due diligence along the supply chain. So far, these demands have met with little response in Bern. On the contrary, parliament recently explicitly exempted lawyers and fiduciaries from requirements under the Money Laundering Act, thus also leaving a loophole for the delicate commodities business.

Neutrality reinterpreted

At least the trade in oil and gas between Geneva and Zug could come to a standstill after all if the EU decides to impose an import ban in the next few days or weeks. Swiss banks are already reluctant to provide new loans for the delicate business.

Following the government’s decision in Berlin to put Nord Stream 2 on ice, there was a mass layoff at the pipeline operator’s Zug headquarters: 140 people lost their jobs at the Gazprom subsidiary, Economy Minister Guy Parmelin said. It may not stop there. Other democracies and states that stand up for international law must be able to rely on Switzerland, said President Ignazio Cassis after accepting the EU’s first sanctions packages.

This is a change from the past, because at least until 1990, Switzerland did not even comply with UN sanctions. Since then, the government has had to reinterpret neutrality time and again. In the Ukraine war, the case was clearer under international law than it had been for a long time. Russia is the aggressor, Ukraine the victim. Standing aside might have been the real breach of neutrality. The Swiss government will probably have to argue in a similar way if the EU further tightens its sanctions and agrees to an import ban on Russian gas and oil. Stephan Israel

LfM boss Schmid wants media institutions as Digital Services Coordinator

“There are many competent authorities, but only the state media authorities fulfill the principle of state neutrality,” says Schmid. Even the Federal Office of Justice, which is currently often brought into the discussion, cannot fulfill this. The Bundestag and the federal government also disregarded the criterion of state neutrality in the case of the Network Enforcement Act.

As a result, the Cologne Administrative Court last week effectively suspended key elements of the law. As a result, a specially established department at the Federal Criminal Police Office with around 200 positions cannot examine any reports from the major social networks until further notice, but instead processes tips from several public prosecutors’ offices about possible criminal offenses on the Internet.

Schmid emphasizes that the pressure for action from politicians on the issue of hate speech was understandable, but the execution was rushed by the governing parties. “No one wanted to contradict the other because they understandably didn’t want to show any weakness in the fight against hate speech. Then, at the end of the legislature, they still cobbled together a law,” says the head of the authorities. The ruling from Cologne is therefore no surprise.

State neutrality also mandatory for DSC and RT ban

Who is the appropriate and competent authority is also highly controversial elsewhere. Schmid is critical of the blocking of the state broadcasters RT (Russia Today) and Sputnik by the Commission and the Council as part of the sanctions against Russia, since this lacks media policy competence. The Association of Private Media (Vaunet) also voiced its criticism to Europe.Table, emphasizing that a non-governmental supervision would be the most effective way to deal with such measures.

“The only country in Europe that has already concluded proceedings against RT is Germany, “ Schmid says. The authorities had already been showing the channel the limits since the summer of 2021. For example, he says, the channel was taken off satellite, and the Medienanstalt Berlin-Brandenburg (mabb) imposed regulatory fines in March. “No other European country has managed that, and it wasn’t the European Commission either,” adds the head of the authority.

If the media institutions were to take on the role of “digital service coordinator,” however, Schmid would like to see a revision of the law beforehand. “There is no regulation in all of European law that stipulates that a satellite is subject to supervision. There is also no functioning and expedient liability mechanism for a hosting provider. The DSA does not hold any mechanism either,” explains the head of the authority.

His assessment is therefore scathing: “Everything remains exactly as it is – except for the fact that it is becoming one more level more complicated.” Since the DSA can hardly be adopted as planned within the French Council Presidency in view of the current political agenda, there is enough time for a fundamental revision.

Liability privilege for hosting providers

In particular, the broad liability privilege of hosting providers is a thorn in Schmid’s side. So far, these providers have not been required to actively check content, even in extreme cases. The State Media Authority of North Rhine-Westphalia recently made headlines with its blocking orders to German Internet providers at the domain name server (DNS) level against the porn portal xHamster. Telefonica has already announced that it will appeal the order. However, LfM Director Tobias Schmid is confident that the decision will stand up to legal scrutiny. Once the five largest German end-customer providers have implemented the block, further blocking orders are to be sent to other providers.

Schmid sees such activities as proof that the German system is not inferior to the better staffed central authorities in other European countries. The federal system provides the necessary distance from the state. At the same time, German media regulators have shown that they can work efficiently.

Centralized and decentralized at the same time

However, this also includes a clear division of labor. For example, individual areas such as European policy, supervision of media intermediaries or the promotion of media competence have been assigned to individual authorities. These departments are responsible for the actual supervisory work, but decisions must be coordinated jointly by the 14 different state authorities. In an interview with Europe.Table, Schmid pleaded for these assignments to be made permanent and not reassigned on a rotational basis each time. However, permanent allocations would not make sense either, as centralization must be avoided.

However, at first glance, it is not clear to the supervised parties when they have to talk to a state media authority directly, to the Directors’ Conference of the Media Authorities (DLM), to the Commission for Licensing and Supervision (ZAK) or to one of the other entities of German media supervision.

Schmid wants to address such problems by using new software. Since spring 2021, the authority has been using software that uses artificial intelligence to search for media law violations . “Since we started using this tool, we have identified 14,000 cases, of which almost 9,000 turned out to be legal violations,” Schmid says. The success has impressed other authorities, he says. For example, the software is currently being rolled out not only in the 13 other media institutions. There have also been requests from Austria, Spain, Luxembourg, France, Belgium and Italy to use the software as well. Torsten Kleinz

DSA and DMA trilogies: advertising and data portability

Online advertising as a business model is the subject of criticism from many directions. In the current negotiations between the Commission, the Council, and the Parliament on the Digital Services Act (DSA) and the Digital Markets Act (DMA), there are once again different approaches whose interaction is currently still unclear.

The second political and thus first political-substantive trilogue is scheduled for next Tuesday at the DSA, but before that, one of the issues at stake these days is how much transparency should be imposed on online advertising. For example, particularly large online platforms (VLOPs) could be required to disclose not only time periods, target groups, and clients of advertising content, but also, if different, the entities paying for the advertising.

One of the issues currently being debated at the DMA is how the major gatekeepers should structure access to advertising playout data, for example for publishers or the advertising industry. This is intended to counter possible abuse of their own position.

Also still unresolved is the extent to which gatekeepers such as Apple, Amazon, Microsoft or Google should be prohibited via the DMA from imposing certain proprietary technologies on other providers on their platforms, such as browsers, authentication services or payment services. This would affect the highly integrated Apple system in particular, but other providers would also have to take some unbundling steps here if necessary.

According to negotiating circles at the DMA, however, there has been convergence on the issue of data portability: both end-users and business customers could in future have extensive data portability rights vis-à-vis gatekeepers. These rights could also include processed and linked data of certain core applications. fst

EP: Pegasus special committee decided

With a broad majority of 635 votes in favor and only 36 against, the European Parliament has decided to set up a special committee to investigate the possible use of the Pegasus spyware from the Israeli manufacturer NSO Group in violation of European law. The task of the special committee covers not only this specific product, but also the use of comparable spyware. Both the use by EU member states such as Hungary and Poland and the use by third countries are to be investigated. The Special Committee’s mand ate explicitly includes the question of whether the use of spyware for “political, economic or other unjustified purposes” against “journalists, politicians, law enforcement officials, diplomats, lawyers, business people, civil society representatives or others” is a violation of European law.

Among other things, this involves the suspicion that the spying software was misused in election campaigns. The question of when the EU Commission knew what was going on is also to be clarified by the special committee. Within 12 months, the 38-member committee is also to develop proposals on how EU institutions, members and employees can be better protected against spyware.

Unlike a Bundestag investigative committee, however, an EP special committee does not have special rights such as the right to summon witnesses or to inspect files, and is therefore dependent on cooperation from member state agencies.

“The already documented use of spying software against journalists, lawyers and politicians is extremely worrying and a serious violation of fundamental rights,” says Hannah Neumann (Greens/EFA). She added that this undermines democracy and trust in processes based on the rule of law and should not remain without consequences. “It is the task of the investigative committee to investigate such cases, impose sanctions and prevent further abuse.” fst

EU Health Data Space: Commission proposal on the table

It is the first sector-specific data space in the Union: the European Health Data Space. In early April, the EU Commission planned to present its proposed regulation for the European Health Data Space (EHDS). The draft, which the French news portal Contexte has already made public, contains rules, common standards and practices, and a governance framework for the primary and secondary use of electronic health data.

Primary use

Accordingly, the Commission grants EU citizens the right to “immediate access, free of charge, to their personal electronic health data in an easily readable and accessible form,” for example in a unified electronic health record. Each member state must establish a national facility to provide, among other things, the necessary eHealth services. This body must be equipped with the human, technical, and financial resources, premises, and infrastructure necessary for the effective performance of its tasks.

To enable people to share their health data across borders with health professionals in other Member States, and in their language, Member States’ participation in the MyHealt@EU18 digital infrastructure should be mandatory.

Secondary use

With the law, the EU Commission also wants to create a decentralized European infrastructure for the secondary use of health data. To this end, it is obliging EU countries to designate one or more authorities responsible for access to health data for research, innovation or political decision-making purposes. An EU-wide infrastructure for the exchange and secondary use of electronic health data is currently being prepared by a pilot project within the framework of EU4Health (Europe.Table reported).

The Commission defines a number of data categories for secondary use. Accordingly, providers of electronic health data must ensure that at least the specified categories of electronic health data are collected and available. These include, but are not limited to, electronic health record data, genetic and genomic data, public registry and clinical trial data, as well as relevant electronic social data that impact health, health-related electronic administrative data, including claims and reimbursement data.

Ten purposes for secondary use

The draft regulation also identifies ten purposes that allow access to the health data collected. These include public health research and studies, for example, to improve the quality of health care. Public entities or agencies are to be assisted with the data in fulfilling their responsibilities, such as guiding and monitoring health policy decision-making, planning, and reporting obligations, monitoring health care delivery, and managing costs. The health data may also be used for, among other things, national, transnational, and EU-wide statistics, educational or teaching activities, scientific research, development, and innovation activities, and training, testing, and evaluation of algorithms in medical devices.

According to the draft legislation, the Commission wants to establish a European Digital and Health Data Committee and two subgroups on primary and secondary data, respectively. The committee is to consist of representatives from the competent authorities of all member states and the Commission. European institutions, bodies, and agencies involved in research, health policy or analysis, including the EMA and ECDC, will be given observer status.

The regulation is scheduled to enter into force on the 20th day following its publication in the Official Journal of the European Union and will apply after a transition period of 12 months. The Commission is expected to present the draft legislation on April 5. A detailed analysis of the draft regulation on the European Health Data Space will appear at Europe.Table on Monday. ank

Hundreds of leased aircraft stuck in Russia

The landlords of hundreds of aircraft in Russia are unlikely to see their property again any time soon because of the sanctions. A Russian draft law published Thursday suggests years of litigation over jets worth tens of billions of US dollars are likely to ensue. Western sanctions against Russia over the war in Ukraine are forcing Western leasing companies to cancel contracts with Russian airlines by March 28. But whether they will get their property is unclear. According to the Russian Transport Ministry’s draft, if the contracts are terminated, a government commission will decide whether the aircraft can be returned or must remain in Russia. The Russian airlines could also register the aircraft as their property in Russia and obtain operating licenses.

The termination of cross-border contracts and the return of aircraft is governed by the Cape Town International Agreement, to which Russia also acceded. This would allow an orderly process for returning jets. But the Russian bill is a breach of that agreement, said Eddy Pieniazek, head of analysis at British aviation consultancy Ishka. Lease payments are to be made in rubles instead of the contract currency, the dollar, under Russia’s proposal, which is likely to shrink the total given the massive drop in the Russian currency.

Political risk overlooked

A total of almost 780 aircraft are leased by Russian airlines, of which 515 belong to foreign lessors. So far, Russian airlines have not returned the planes, aviation expert Bertrand Grabowski said. Only a handful of planes that were abroad had been secured, he said. The Russian market and the leading airline Aeroflot had been considered very reliable. But the political risk had been ignored.

The aircraft leasing industry, which owns more than half of the world’s aircraft worth around $300 billion, is facing massive losses. It is questionable whether insurance companies with war risk policies will step in. Experts expect a protracted legal battle over this. rtr

Interest rate turnaround: Lagarde not showing her cards when it comes to timing

ECB President Christine Lagarde is leaving the timing of an interest rate turnaround open. This could take place “some time” after bond purchases end in the third quarter, Lagarde said Thursday after the ECB’s interest rate meeting. That could mean a week or even a few months after that. At the same time, Lagarde acknowledged that there had been differing views in the Governing Council. “We had very intense discussions about the current economic situation, about the outlook, about the uncertainty,” she said.

In view of rapidly rising prices, the ECB paved the way for an interest rate turnaround two weeks after the outbreak of the Ukraine war. It signaled that it would reduce its multi-billion bond purchases more quickly and phase them out completely in the third quarter. This is seen as a prerequisite for a move away from the zero interest rate policy. However, the end of the purchases is subject to the condition that inflation continues to develop as expected by the monetary authorities in the medium term, even after the bond purchases have ended.

Lagarde said that in light of the Ukraine war, the ECB is ready to take whatever steps are necessary to ensure price and financial stability in the euro area. “We will ensure smooth liquidity conditions and implement the sanctions decided by the European Union and European governments,” Lagarde said. rtr

Max Müller – Bayer’s chief lobbyist

Max Müller is Head of Public Affairs for Germany and the EU at Bayer.

Never talk to a pharmacist about Max Müller, and if you do, hope you can run faster. For years, Max Müller, the face of the online pharmacy DocMorris, received the concentrated fury of the German pharmacy community. The anger about an upheaval, about a conflict between the established pharmacies and the new online start-ups. For many, Müller was and still is the symbolic figure of the mail-order pharmaceutical business. “The sheer rage and verbal aggression that I was met with as a person really stunned me at times,” Müller recalls.

His move to pharmaceutical giant Bayer may have come as a surprise to some pharmacists. Müller moved from the competition to the most important partner of German pharmacies. Since the spring of 2020, he has been responsible for public affairs in Germany and the EU, as well as for the company’s sustainability strategies. “Public Affairs & Sustainability”, two areas that were certainly not merged at Bayer by chance.

At the latest since the acquisition of Monsanto in 2018, Bayer has had an image problem. Headlines of glyphosate litigation dominate the public image. “Sustainability is deeply embedded in Bayer’s core, but it takes a lot of explanation to communicate it to stakeholders, be it customers, society or politics,” says Müller.

Long legal battle over Rx mail order business

Formative for Müllers was his time at the Aloisiuskolleg in Bonn. “Here, not only were subjects taught, but they were prepared for life”. Of course, faith played a major role at the Catholic high school, but never in a dogmatic way, rather in a way that conveyed values. His first contact with politics and public relations was with the press staff of the Ministry of Defense. As a young conscript he worked alongside the press officers of the armed forces and then-Defense Minister Volker Rühe. “That was the time around foreign deployments, the controversy around training in Hammelburg, the plane crash in Namibia. Getting to see all that up close and personal was fascinating.”

Müller then studied law, a decision that was not entirely voluntary. His father told him, “You can study whatever you want: business administration, mechanical engineering, or law. Müller was already advising DocMorris on legal issues in the PR agency he founded after graduating. The legal dispute surrounding the Rx mail-order business, the online trade in prescription drugs, has accompanied Müller for most of his career to date.

After a long back and forth between German courts and the European Court of Justice, the Bundestag enshrined the Rx bonuses ban in social law. In doing so, Germany circumvented a 2016 ECJ ruling that foreign mail-order companies such as DocMorris do not have to adhere to German price controls.

“Bayer is not just glyphosate”

One legal issue that will concern Bayer this year is the EU approval of glyphosate. This expires at the end of 2022. Müller is aware that it will be a Herculean task to get Bayer out of its current image crisis. But he loves the challenges and, more importantly, is convinced of Bayer as a company.

“Bayer is not just glyphosate, even though I don’t see anything bad in it. What Bayer does, develops and researches is overlooked or ignored by many. These oversimplifications stand in the way of a real debate. Cynics would probably reply, “Yes, Bayer is not only a producer of glyphosate, but also one of the world’s biggest air polluters and a defendant in lawsuits concerning the contraceptive Essure. Discussions that Max Müller will probably have to have more often in the coming years. However, anyone who has had to endure the wrath of the pharmacy community for years is certainly not afraid of Bayer’s critics. David Zauner

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

With drastic words, Latvian Prime Minister Krisjanis Karins yesterday called for even tougher sanctions against Russia: “We must not only isolate Putin’s economy, but cripple it.” However, at the informal summit of 27 heads of state and government, there was no majority in favor of stopping oil and gas imports from Russia, as Stephan Israel reports from Versailles. The EU Commission is now to present proposals on how Europe can end its dependence on Russian energy sources as early as 2027 and how it can respond to the enormously high energy prices. This could include a price cap. However, Germany and other countries have so far rejected this very expensive option.

Even Switzerland, whose highest principles include foreign policy neutrality, has adopted Western sanctions against Russia, albeit under pressure from Washington. Since then, the understanding of neutrality has been debated in the country, but in view of the clear situation under international law, standing aside would possibly have been the actual breach of neutrality.

With regard to the Digital Services Act, which is currently in the trilogue, the question currently arises as to who will be responsible for enforcing the rules. The state media authorities see this task as their own, since the federal system is the only way to ensure the necessary state neutrality, says Tobias Schmid, Director of the State Media Authority of North Rhine-Westphalia and European Commissioner of the Directors’ Conference of the Media Authorities (DLM), in an interview with Torsten Kleinz.

Your
Lisa-Martina Klein

EU Summit: no majority for energy sanctions

The setting could not have been more symbolic, the contrast to the seriousness of the situation could hardly have been greater. Emmanuel Macron received the EU heads of state and government yesterday for the two-day informal summit at the Palace of Versailles. Against the backdrop of Russia’s war of aggression on Ukraine, the French president called for unity and strength.

The focus here was on how the EU can reduce its dependence on Russian energy sources, strengthen its defense capabilities and make the economy more resilient. It is possible that Vladimir Putin will use gas supplies as a weapon, Macron warned in the evening. Europe is dependent and vulnerable here. The EU must prepare for all scenarios.

Latvian Prime Minister Krisjanis Karins was among those who also publicly pleaded for a faster pace on sanctions: “We must not only isolate Putin’s economy, but cripple it.” The EU must exclude all Russian banks from the payment service provider Swift and stop the import of oil and gas. Only in this way could Putin be forced to the negotiating table and the war stopped.

According to diplomats, the other two Baltic states and Poland are calling for a hard line. There was also encouragement from EU Parliament President Roberta Metsola: “In these moments of crisis, we must remember that energy is political and always has been.” The summit statement said the EU was “determined to further increase pressure on Russia and Belarus.” It said it remains ready to quickly impose further sanctions.

Commission to present proposals

Is Germany coming under pressure again after the tug-of-war over Nordstream 2? Asked whether he ruled out a gas import freeze, Chancellor Olaf Scholz gave an evasive answer, saying that very precise sanctions had been laid down in recent weeks, with export and import restrictions as well as massive measures in the financial and economic spheres. These had had a massive impact and would continue to do so. According to diplomats, supporters of energy sanctions were in the minority at the summit.

The recent announcement by EU Commission President Ursula von der Leyen to reduce dependence on Russian gas and oil by two-thirds as early as this year met with support. According to the original proposal, the EU was also to manage entirely without energy from Russia by 2030. Now the target is to be reached as early as 2027. Ursula von der Leyen announced on Twitter that she had been instructed by the heads of state and government to present a proposal with the earlier phase-out date by mid-May.

Another topic was the rising prices for energy: “We must protect our citizens and companies,” said Macron. And he pointed out that France had already had a price cap in place since last year. If prices continue to rise, however, permanent and European solutions will be needed. He added that the Commission would be given a mandate to this effect.

Price cap as an option

Von der Leyen confirmed via Twitter that she would present options for emergency measures by the end of March and explicitly mentioned temporary price limits as a possibility. The aim is to limit the “contagion effects” between rising gas prices and those for electricity.

Germany, together with other member states such as the Netherlands, is also one of the brakemen here, having so far rejected changes to the market design. The discussion about energy price caps will continue, diplomats said on the sidelines of the summit. No convincing models have been presented so far, they said. It is difficult to justify indirectly subsidizing all energy consumers with price caps, rather than just companies and households that are particularly burdened, they said. In France, the various support measures have so far burdened the national budget to the tune of around €20 billion.

The Commission President also announced that she would present options by the end of May to improve the design of the electricity market with a view to reducing CO₂ emissions. In addition, Ursula von der Leyen wants to relax state aid law to allow compensation payments to industries that are particularly affected by the price shock. At the same time, the Commission’s communication provides that unexpected profits of energy companies can be additionally taxed. Owners of gas storage facilities are also to be required to fill their storage facilities to 90 percent by October 1.

The Palace of Versailles was designated as the venue for the informal summit long before Russia’s attack on Ukraine, diplomats said. Emmanuel Macron is hosting the meeting because France currently holds the EU presidency. For the president, it’s also an opportunity to make his mark as a statesman in front of his countrymen before his re-election in April. The meeting was supposed to have been about Europe’s economic model for the future and the question of strategic autonomy. Now Vladimir Putin was the elephant in the room at the Palace of Versailles.

No rapid EU accession of Ukraine

Macron recalled that in better times he had once also received the Russian president in the historic walls. Nothing justifies starting a war, the French president said. Addressing the situation in the besieged city of Mariupol, he accused Vladimir Putin of waging a war whose goal is to kill civilians, especially women and children. There will be no solution in the coming hours and days, Macron said pessimistically, with a view to a ceasefire.

For the French president, Europe’s “strategic sovereignty” is a core concern that he now wants to accelerate, even against the backdrop of the Russian war of aggression. For some in the club, this sometimes happens too quickly. The French idea for a new defense fund, for example, met with little approval in the run-up to the summit. The topic is likely to be discussed today on the second day of the summit when Eurogroup head Paschal Donohoe and ECB chief Christine Lagarde will also join the meeting.

According to French hopes, the EU Commission should raise funds in the amount of €200 billion, similar to the COVID-19 Reconstruction Fund, and use them to co-finance joint armament projects of the member states, for example. The critics argue that the funds from the €750 billion COVID-19 Reconstruction Fund have not even begun to be exhausted.

However, there are also differences of opinion on the question of how the EU should deal with the membership applications of Ukraine, Georgia, and Moldova. Eastern European member states have so far urged in vain that Ukraine at least be quickly granted candidate status as an act of solidarity. Accession negotiations are a lengthy process and not for a country at war, the majority said. “Nobody can join the EU overnight,” Croatian Prime Minister Andrej Plenkovic said after the discussion.

Ukraine already has an association agreement, but the possibilities there have not yet been exhausted. The country could participate in a number of additional EU programs, government members could be regularly invited to ministerial meetings in Brussels. “Ukraine is part of our European family,” the final declaration reads. Stephan Israel

Russian raw materials: pressure on Switzerland increases

Even neutral Switzerland supports the EU sanctions against Russian oligarchs, authorities and companies, Ukrainian President Volodymyr Zelensky congratulated last week. He said no one could remain neutral in the face of Russia’s war of aggression. The special praise came after the Swiss government first hesitated and then, after massive pressure from Washington and Brussels, fully endorsed the EU’s punitive measures.

Since then, a discussion has begun in Switzerland about the importance of neutrality. At the same time, a discreet but extremely lucrative industry has come into focus. Indeed, according to Swiss authorities, about 80 percent of Russia’s commodity trade is conducted in Geneva, Zug, Lugano, and Zurich. So far, the EU has exempted all oil and gas trade from its sanctions. However, this could soon change after the USA has submitted here.

Switzerland could therefore quickly find itself in a tight spot again and also be confronted with unpleasant questions: How is it that business with raw materials from Russia is conducted almost exclusively via Switzerland? It cannot be due to the beautiful mountains alone.

Public Eye, a non-governmental organization based in Bern, has been targeting the industry for some time. At stake are 500 companies with fewer than 5,000 employees. According to Oliver Classen of Public Eye, a bundle of reasons has caused the concentration. A key role is played by the “favorable regulatory climate”, i.e. the low due diligence requirements when it comes to combating money laundering and corruption.

Warning against damage to reputation

Added to this are the low taxes, the favorable financing opportunities in the Swiss banking center, the political stability and, of course, a certain clustering. In Geneva, companies such as Gunvor and Trafigura concentrate their business with Russian oil, while Gazprom trades in gas from Zug. With the exception of gold, hardly any of the commodities ever come to Switzerland. Oliver Classen speaks of transit trade. The traders in Switzerland sit at their computers and organize the business between Russia and buyers worldwide.

Thanks to the sale of oil and gas, around 30 billion dollars a month flow to Russia, largely via Switzerland, and fill Vladimir Putin’s war chests there. Non-governmental organizations such as Public Eye have been warning for years that Switzerland could suffer similar reputational damage in commodities trading as it once did with banking secrecy.

Switzerland is a dominant trading center not only for Russian oil and gas, but also for resource-rich and traditionally corruption-prone countries in Africa. Switzerland once had to give up banking secrecy after tough resistance from politics and business under pressure from Washington and Brussels. The Swiss financial center also had to accept strict rules against money laundering. Since then, Swiss banks have been practicing their so-called white money strategy, at least toward clients from industrialized countries.

Commodity market hardly regulated

Unlike the financial market, the commodities market is still hardly regulated today. The deficit is exacerbated by the fact that commodity trading and commodity extraction are increasingly merging. Some of the Swiss trading houses, such as Glencore, are no longer pure traders and have expanded their activities along the value chains. This also multiplies the vulnerability to corruption and threats to Switzerland’s reputation.

In a 2018 country assessment of Switzerland, for example, the OECD stated that commodity trading posed particularly high risks. This, it said, was due to the very high profit opportunities, the lack of transparency around sales, and the absence of international standards for these transactions. The OECD called on Switzerland to take stronger law enforcement measures as well as measures to prevent cross-border corruption.

With this in mind, Public Eye is also urging the Swiss government to establish a commodity market regulator similar to the financial market regulator. This supervisory authority would have to ensure that companies conduct due diligence along the supply chain. So far, these demands have met with little response in Bern. On the contrary, parliament recently explicitly exempted lawyers and fiduciaries from requirements under the Money Laundering Act, thus also leaving a loophole for the delicate commodities business.

Neutrality reinterpreted

At least the trade in oil and gas between Geneva and Zug could come to a standstill after all if the EU decides to impose an import ban in the next few days or weeks. Swiss banks are already reluctant to provide new loans for the delicate business.

Following the government’s decision in Berlin to put Nord Stream 2 on ice, there was a mass layoff at the pipeline operator’s Zug headquarters: 140 people lost their jobs at the Gazprom subsidiary, Economy Minister Guy Parmelin said. It may not stop there. Other democracies and states that stand up for international law must be able to rely on Switzerland, said President Ignazio Cassis after accepting the EU’s first sanctions packages.

This is a change from the past, because at least until 1990, Switzerland did not even comply with UN sanctions. Since then, the government has had to reinterpret neutrality time and again. In the Ukraine war, the case was clearer under international law than it had been for a long time. Russia is the aggressor, Ukraine the victim. Standing aside might have been the real breach of neutrality. The Swiss government will probably have to argue in a similar way if the EU further tightens its sanctions and agrees to an import ban on Russian gas and oil. Stephan Israel

LfM boss Schmid wants media institutions as Digital Services Coordinator

“There are many competent authorities, but only the state media authorities fulfill the principle of state neutrality,” says Schmid. Even the Federal Office of Justice, which is currently often brought into the discussion, cannot fulfill this. The Bundestag and the federal government also disregarded the criterion of state neutrality in the case of the Network Enforcement Act.

As a result, the Cologne Administrative Court last week effectively suspended key elements of the law. As a result, a specially established department at the Federal Criminal Police Office with around 200 positions cannot examine any reports from the major social networks until further notice, but instead processes tips from several public prosecutors’ offices about possible criminal offenses on the Internet.

Schmid emphasizes that the pressure for action from politicians on the issue of hate speech was understandable, but the execution was rushed by the governing parties. “No one wanted to contradict the other because they understandably didn’t want to show any weakness in the fight against hate speech. Then, at the end of the legislature, they still cobbled together a law,” says the head of the authorities. The ruling from Cologne is therefore no surprise.

State neutrality also mandatory for DSC and RT ban

Who is the appropriate and competent authority is also highly controversial elsewhere. Schmid is critical of the blocking of the state broadcasters RT (Russia Today) and Sputnik by the Commission and the Council as part of the sanctions against Russia, since this lacks media policy competence. The Association of Private Media (Vaunet) also voiced its criticism to Europe.Table, emphasizing that a non-governmental supervision would be the most effective way to deal with such measures.

“The only country in Europe that has already concluded proceedings against RT is Germany, “ Schmid says. The authorities had already been showing the channel the limits since the summer of 2021. For example, he says, the channel was taken off satellite, and the Medienanstalt Berlin-Brandenburg (mabb) imposed regulatory fines in March. “No other European country has managed that, and it wasn’t the European Commission either,” adds the head of the authority.

If the media institutions were to take on the role of “digital service coordinator,” however, Schmid would like to see a revision of the law beforehand. “There is no regulation in all of European law that stipulates that a satellite is subject to supervision. There is also no functioning and expedient liability mechanism for a hosting provider. The DSA does not hold any mechanism either,” explains the head of the authority.

His assessment is therefore scathing: “Everything remains exactly as it is – except for the fact that it is becoming one more level more complicated.” Since the DSA can hardly be adopted as planned within the French Council Presidency in view of the current political agenda, there is enough time for a fundamental revision.

Liability privilege for hosting providers

In particular, the broad liability privilege of hosting providers is a thorn in Schmid’s side. So far, these providers have not been required to actively check content, even in extreme cases. The State Media Authority of North Rhine-Westphalia recently made headlines with its blocking orders to German Internet providers at the domain name server (DNS) level against the porn portal xHamster. Telefonica has already announced that it will appeal the order. However, LfM Director Tobias Schmid is confident that the decision will stand up to legal scrutiny. Once the five largest German end-customer providers have implemented the block, further blocking orders are to be sent to other providers.

Schmid sees such activities as proof that the German system is not inferior to the better staffed central authorities in other European countries. The federal system provides the necessary distance from the state. At the same time, German media regulators have shown that they can work efficiently.

Centralized and decentralized at the same time

However, this also includes a clear division of labor. For example, individual areas such as European policy, supervision of media intermediaries or the promotion of media competence have been assigned to individual authorities. These departments are responsible for the actual supervisory work, but decisions must be coordinated jointly by the 14 different state authorities. In an interview with Europe.Table, Schmid pleaded for these assignments to be made permanent and not reassigned on a rotational basis each time. However, permanent allocations would not make sense either, as centralization must be avoided.

However, at first glance, it is not clear to the supervised parties when they have to talk to a state media authority directly, to the Directors’ Conference of the Media Authorities (DLM), to the Commission for Licensing and Supervision (ZAK) or to one of the other entities of German media supervision.

Schmid wants to address such problems by using new software. Since spring 2021, the authority has been using software that uses artificial intelligence to search for media law violations . “Since we started using this tool, we have identified 14,000 cases, of which almost 9,000 turned out to be legal violations,” Schmid says. The success has impressed other authorities, he says. For example, the software is currently being rolled out not only in the 13 other media institutions. There have also been requests from Austria, Spain, Luxembourg, France, Belgium and Italy to use the software as well. Torsten Kleinz

DSA and DMA trilogies: advertising and data portability

Online advertising as a business model is the subject of criticism from many directions. In the current negotiations between the Commission, the Council, and the Parliament on the Digital Services Act (DSA) and the Digital Markets Act (DMA), there are once again different approaches whose interaction is currently still unclear.

The second political and thus first political-substantive trilogue is scheduled for next Tuesday at the DSA, but before that, one of the issues at stake these days is how much transparency should be imposed on online advertising. For example, particularly large online platforms (VLOPs) could be required to disclose not only time periods, target groups, and clients of advertising content, but also, if different, the entities paying for the advertising.

One of the issues currently being debated at the DMA is how the major gatekeepers should structure access to advertising playout data, for example for publishers or the advertising industry. This is intended to counter possible abuse of their own position.

Also still unresolved is the extent to which gatekeepers such as Apple, Amazon, Microsoft or Google should be prohibited via the DMA from imposing certain proprietary technologies on other providers on their platforms, such as browsers, authentication services or payment services. This would affect the highly integrated Apple system in particular, but other providers would also have to take some unbundling steps here if necessary.

According to negotiating circles at the DMA, however, there has been convergence on the issue of data portability: both end-users and business customers could in future have extensive data portability rights vis-à-vis gatekeepers. These rights could also include processed and linked data of certain core applications. fst

EP: Pegasus special committee decided

With a broad majority of 635 votes in favor and only 36 against, the European Parliament has decided to set up a special committee to investigate the possible use of the Pegasus spyware from the Israeli manufacturer NSO Group in violation of European law. The task of the special committee covers not only this specific product, but also the use of comparable spyware. Both the use by EU member states such as Hungary and Poland and the use by third countries are to be investigated. The Special Committee’s mand ate explicitly includes the question of whether the use of spyware for “political, economic or other unjustified purposes” against “journalists, politicians, law enforcement officials, diplomats, lawyers, business people, civil society representatives or others” is a violation of European law.

Among other things, this involves the suspicion that the spying software was misused in election campaigns. The question of when the EU Commission knew what was going on is also to be clarified by the special committee. Within 12 months, the 38-member committee is also to develop proposals on how EU institutions, members and employees can be better protected against spyware.

Unlike a Bundestag investigative committee, however, an EP special committee does not have special rights such as the right to summon witnesses or to inspect files, and is therefore dependent on cooperation from member state agencies.

“The already documented use of spying software against journalists, lawyers and politicians is extremely worrying and a serious violation of fundamental rights,” says Hannah Neumann (Greens/EFA). She added that this undermines democracy and trust in processes based on the rule of law and should not remain without consequences. “It is the task of the investigative committee to investigate such cases, impose sanctions and prevent further abuse.” fst

EU Health Data Space: Commission proposal on the table

It is the first sector-specific data space in the Union: the European Health Data Space. In early April, the EU Commission planned to present its proposed regulation for the European Health Data Space (EHDS). The draft, which the French news portal Contexte has already made public, contains rules, common standards and practices, and a governance framework for the primary and secondary use of electronic health data.

Primary use

Accordingly, the Commission grants EU citizens the right to “immediate access, free of charge, to their personal electronic health data in an easily readable and accessible form,” for example in a unified electronic health record. Each member state must establish a national facility to provide, among other things, the necessary eHealth services. This body must be equipped with the human, technical, and financial resources, premises, and infrastructure necessary for the effective performance of its tasks.

To enable people to share their health data across borders with health professionals in other Member States, and in their language, Member States’ participation in the MyHealt@EU18 digital infrastructure should be mandatory.

Secondary use

With the law, the EU Commission also wants to create a decentralized European infrastructure for the secondary use of health data. To this end, it is obliging EU countries to designate one or more authorities responsible for access to health data for research, innovation or political decision-making purposes. An EU-wide infrastructure for the exchange and secondary use of electronic health data is currently being prepared by a pilot project within the framework of EU4Health (Europe.Table reported).

The Commission defines a number of data categories for secondary use. Accordingly, providers of electronic health data must ensure that at least the specified categories of electronic health data are collected and available. These include, but are not limited to, electronic health record data, genetic and genomic data, public registry and clinical trial data, as well as relevant electronic social data that impact health, health-related electronic administrative data, including claims and reimbursement data.

Ten purposes for secondary use

The draft regulation also identifies ten purposes that allow access to the health data collected. These include public health research and studies, for example, to improve the quality of health care. Public entities or agencies are to be assisted with the data in fulfilling their responsibilities, such as guiding and monitoring health policy decision-making, planning, and reporting obligations, monitoring health care delivery, and managing costs. The health data may also be used for, among other things, national, transnational, and EU-wide statistics, educational or teaching activities, scientific research, development, and innovation activities, and training, testing, and evaluation of algorithms in medical devices.

According to the draft legislation, the Commission wants to establish a European Digital and Health Data Committee and two subgroups on primary and secondary data, respectively. The committee is to consist of representatives from the competent authorities of all member states and the Commission. European institutions, bodies, and agencies involved in research, health policy or analysis, including the EMA and ECDC, will be given observer status.

The regulation is scheduled to enter into force on the 20th day following its publication in the Official Journal of the European Union and will apply after a transition period of 12 months. The Commission is expected to present the draft legislation on April 5. A detailed analysis of the draft regulation on the European Health Data Space will appear at Europe.Table on Monday. ank

Hundreds of leased aircraft stuck in Russia

The landlords of hundreds of aircraft in Russia are unlikely to see their property again any time soon because of the sanctions. A Russian draft law published Thursday suggests years of litigation over jets worth tens of billions of US dollars are likely to ensue. Western sanctions against Russia over the war in Ukraine are forcing Western leasing companies to cancel contracts with Russian airlines by March 28. But whether they will get their property is unclear. According to the Russian Transport Ministry’s draft, if the contracts are terminated, a government commission will decide whether the aircraft can be returned or must remain in Russia. The Russian airlines could also register the aircraft as their property in Russia and obtain operating licenses.

The termination of cross-border contracts and the return of aircraft is governed by the Cape Town International Agreement, to which Russia also acceded. This would allow an orderly process for returning jets. But the Russian bill is a breach of that agreement, said Eddy Pieniazek, head of analysis at British aviation consultancy Ishka. Lease payments are to be made in rubles instead of the contract currency, the dollar, under Russia’s proposal, which is likely to shrink the total given the massive drop in the Russian currency.

Political risk overlooked

A total of almost 780 aircraft are leased by Russian airlines, of which 515 belong to foreign lessors. So far, Russian airlines have not returned the planes, aviation expert Bertrand Grabowski said. Only a handful of planes that were abroad had been secured, he said. The Russian market and the leading airline Aeroflot had been considered very reliable. But the political risk had been ignored.

The aircraft leasing industry, which owns more than half of the world’s aircraft worth around $300 billion, is facing massive losses. It is questionable whether insurance companies with war risk policies will step in. Experts expect a protracted legal battle over this. rtr

Interest rate turnaround: Lagarde not showing her cards when it comes to timing

ECB President Christine Lagarde is leaving the timing of an interest rate turnaround open. This could take place “some time” after bond purchases end in the third quarter, Lagarde said Thursday after the ECB’s interest rate meeting. That could mean a week or even a few months after that. At the same time, Lagarde acknowledged that there had been differing views in the Governing Council. “We had very intense discussions about the current economic situation, about the outlook, about the uncertainty,” she said.

In view of rapidly rising prices, the ECB paved the way for an interest rate turnaround two weeks after the outbreak of the Ukraine war. It signaled that it would reduce its multi-billion bond purchases more quickly and phase them out completely in the third quarter. This is seen as a prerequisite for a move away from the zero interest rate policy. However, the end of the purchases is subject to the condition that inflation continues to develop as expected by the monetary authorities in the medium term, even after the bond purchases have ended.

Lagarde said that in light of the Ukraine war, the ECB is ready to take whatever steps are necessary to ensure price and financial stability in the euro area. “We will ensure smooth liquidity conditions and implement the sanctions decided by the European Union and European governments,” Lagarde said. rtr

Max Müller – Bayer’s chief lobbyist

Never talk to a pharmacist about Max Müller, and if you do, hope you can run faster. For years, Max Müller, the face of the online pharmacy DocMorris, received the concentrated fury of the German pharmacy community. The anger about an upheaval, about a conflict between the established pharmacies and the new online start-ups. For many, Müller was and still is the symbolic figure of the mail-order pharmaceutical business. “The sheer rage and verbal aggression that I was met with as a person really stunned me at times,” Müller recalls.

His move to pharmaceutical giant Bayer may have come as a surprise to some pharmacists. Müller moved from the competition to the most important partner of German pharmacies. Since the spring of 2020, he has been responsible for public affairs in Germany and the EU, as well as for the company’s sustainability strategies. “Public Affairs & Sustainability”, two areas that were certainly not merged at Bayer by chance.

At the latest since the acquisition of Monsanto in 2018, Bayer has had an image problem. Headlines of glyphosate litigation dominate the public image. “Sustainability is deeply embedded in Bayer’s core, but it takes a lot of explanation to communicate it to stakeholders, be it customers, society or politics,” says Müller.

Long legal battle over Rx mail order business

Formative for Müllers was his time at the Aloisiuskolleg in Bonn. “Here, not only were subjects taught, but they were prepared for life”. Of course, faith played a major role at the Catholic high school, but never in a dogmatic way, rather in a way that conveyed values. His first contact with politics and public relations was with the press staff of the Ministry of Defense. As a young conscript he worked alongside the press officers of the armed forces and then-Defense Minister Volker Rühe. “That was the time around foreign deployments, the controversy around training in Hammelburg, the plane crash in Namibia. Getting to see all that up close and personal was fascinating.”

Müller then studied law, a decision that was not entirely voluntary. His father told him, “You can study whatever you want: business administration, mechanical engineering, or law. Müller was already advising DocMorris on legal issues in the PR agency he founded after graduating. The legal dispute surrounding the Rx mail-order business, the online trade in prescription drugs, has accompanied Müller for most of his career to date.

After a long back and forth between German courts and the European Court of Justice, the Bundestag enshrined the Rx bonuses ban in social law. In doing so, Germany circumvented a 2016 ECJ ruling that foreign mail-order companies such as DocMorris do not have to adhere to German price controls.

“Bayer is not just glyphosate”

One legal issue that will concern Bayer this year is the EU approval of glyphosate. This expires at the end of 2022. Müller is aware that it will be a Herculean task to get Bayer out of its current image crisis. But he loves the challenges and, more importantly, is convinced of Bayer as a company.

“Bayer is not just glyphosate, even though I don’t see anything bad in it. What Bayer does, develops and researches is overlooked or ignored by many. These oversimplifications stand in the way of a real debate. Cynics would probably reply, “Yes, Bayer is not only a producer of glyphosate, but also one of the world’s biggest air polluters and a defendant in lawsuits concerning the contraceptive Essure. Discussions that Max Müller will probably have to have more often in the coming years. However, anyone who has had to endure the wrath of the pharmacy community for years is certainly not afraid of Bayer’s critics. David Zauner