On December 4, 2025, the German Federal Government unveiled its Federal Modernization Agenda, introducing a transformative series of proposed amendments to the General Data Protection Regulation (GDPR) and the country's Federal Data Protection Act (Bundesdatenschutzgesetz).
The centerpiece of these proposals involves a significant reallocation of privacy compliance responsibilities—moving obligations from organizations implementing standard software solutions toward the manufacturers and providers who develop them.
The initiative draws its structural model from existing EU legislation, particularly the Cyber Resilience Act (CRA) and the Artificial Intelligence Act (AI Act), establishing a precedent for shifting regulatory burdens upstream in the technology supply chain.
By placing accountability at the manufacturer level, Germany argues that organizations using standard IT products can deploy compliant solutions with substantially reduced friction and greater certainty of lawful operation.
The Problem: Current Responsibility Gaps
The existing GDPR framework, adopted in 2018, contains provisions explicitly addressing manufacturers and product designers—most notably Article 25, which mandates "data protection by design and by default." Yet in practice, this obligation has been largely absorbed by organizations implementing those products rather than the manufacturers themselves.
Controllers and processors bear the operational burden of ensuring compliance, despite lacking direct control over the products' underlying architecture and security measures.
This enforcement gap creates a peculiar misalignment: while the regulation technically names manufacturers, importers, and suppliers as responsible parties, it is controllers and processors who face de facto accountability in regulatory enforcement and litigation.
For small and medium-sized enterprises (SMEs) deploying off-the-shelf software solutions, this creates substantial administrative and financial obstacles. Organizations must conduct extensive due diligence, implement additional safeguards, and maintain comprehensive documentation to demonstrate compliance with regulations they cannot modify through the underlying product code.
The German Data Protection Conference (Datenschutzkonferenz, DSK)—comprising federal and state data protection authorities—formally recognized this structural deficiency in its 2019 GDPR evaluation.
The organization subsequently adopted a resolution strongly supporting the manufacturer accountability approach, providing institutional backing from the enforcement community itself.
The Proposed Mechanism: Extended Manufacturer Responsibility
Germany's proposal contemplates a material expansion of Article 25 GDPR, fundamentally restructuring how the "data protection by design and by default" principle operates.
Under the revised framework, manufacturers and providers would assume primary responsibility for embedding privacy-compliant features directly into their products at the design and development stage.
This restructuring would serve multiple purposes. First, it transfers the burden of technical compliance implementation to parties best positioned to engineer solutions—the designers themselves.
Second, it enables downstream users to demonstrate lawful operation through documented manufacturer compliance rather than conducting extensive independent audits. Third, it harmonizes GDPR requirements with parallel EU regulatory schemes, creating consistency across the digital regulatory landscape.
The proposal contemplates several operational mechanisms to facilitate this shift. Manufacturers would issue GDPR compliance declarations accompanying their products, creating verifiable documentation of adherence to key regulatory requirements.
Complementary to these declarations, the framework would explore product certification schemes based on GDPR compliance standards, allowing independent verification of manufacturers' claims. Organizations deploying certified products could satisfy regulatory expectations with substantially reduced additional effort.
The DSK's resolution extends the proposed application beyond equipment manufacturers and software developers to include data processors.
Privacy-friendly default settings would become mandatory across the entire product ecosystem, not merely for initial controllers. This encompasses cloud service providers, analytics platforms, content delivery networks, and other intermediary service providers.
Broader Modernization Goals: Relief for Small Business
Germany's manufacturer accountability proposal sits within a broader modernization agenda addressing accumulated compliance burdens on organizations of all sizes, though with particular attention to small and medium enterprises.
The German Federal Government has undertaken extensive consultations with relevant stakeholders and has concluded that existing EU Commission proposals for simplification—specifically the proposed "Digital Omnibus"—do not address compliance barriers sufficiently.
The agenda identifies multiple areas for targeted relief. Article 13 and Article 14 GDPR, which establish comprehensive information requirements for data collection, impose substantial administrative costs on organizations for whom data processing represents a secondary rather than primary function.
Germany proposes allowing organizations to satisfy these requirements by providing contact information and web-based links to detailed privacy notices rather than reproducing complete information materials across multiple collection contexts. This approach would substantially reduce documentation obligations while maintaining substantive transparency.
The notification requirements under Article 33 GDPR—mandating breach notification within 72 hours—present particular challenges for organizations, especially during weekends and holidays when personnel may be unavailable.
Germany proposes extending the notification deadline to three working days, creating consistency with weekend and holiday closures while maintaining responsiveness requirements. The framework would also authorize supervisory authorities to establish centralized reporting channels coordinated with other security incident notification obligations under the EU Cybersecurity Directive (NIS 2).
Additional proposals address data subject access rights under Article 15 GDPR. Germany contends that certain requests for personal data—particularly those manifestly excessive in scope or manifestly unfounded in purpose—divert organizational and regulatory resources without advancing legitimate data protection objectives.
The framework would introduce categories of excessive requests and establish modified evidentiary standards, allowing organizations to charge reasonable fees for fulfilling unusually demanding inquiries or to decline responses to requests lacking legitimate connection to data protection rights.
Regulatory Harmonization and the Digital Ecosystem
A secondary but significant dimension of Germany's modernization proposal involves harmonizing GDPR requirements with other EU digital regulations. The GDPR operates in an increasingly crowded regulatory environment.
Organizations now face overlapping obligations under the EU Cybersecurity Directive, the Digital Services Act, the Digital Markets Act, the emerging Data Act, the AI Act, and sector-specific regulations. These regimes operate under distinct structural logics and sometimes establish conflicting requirements.
By aligning GDPR manufacturer responsibilities with parallel obligations under the CRA and AI Act, Germany's framework reduces regulatory friction and simplifies compliance operations. Organizations developing AI systems, for example, face cumulative requirements under both GDPR and AI Act provisions.
Clarifying how manufacturers must address data protection within AI model development, training, fine-tuning, and deployment processes would remove significant uncertainties that currently complicate technology development.
Germany's proposal explicitly identifies artificial intelligence as an area requiring urgent attention. The GDPR applies in all phases of AI system development and deployment—from training data collection through model deployment.
Yet neither the GDPR nor the AI Act establishes clear protocols for balancing their respective requirements. Organizations face potential conflicts when GDPR principles constrain data collection methods that the AI Act might encourage, or when legitimate AI training purposes conflict with narrow processing restrictions under the GDPR.
Certification and Proof of Compliance
A distinctive feature of the manufacturer responsibility framework involves product certification mechanisms. The DSK's resolution calls for exploring certification schemes based on GDPR compliance standards, enabling manufacturers to obtain independent verification of their compliance claims.
Such mechanisms would create standardized evidence of lawful design, reducing the need for organizations to conduct redundant compliance assessments of commonly used products.
Germany's broader modernization agenda addresses certification more generally, noting that current procedures under Article 42 GDPR for establishing certification processes have become excessively complex and time-consuming.
By streamlining these processes and adjusting timeframes, Germany aims to make certification an accessible tool for demonstrating compliance rather than a rare certification available only for exceptionally large-scale operations.
Addressing Anonymization and Data Security Clarifications
Beyond the central manufacturer responsibility proposal, Germany's agenda calls for regulatory clarification regarding anonymization and pseudonymization. While Recital 26 of the GDPR addresses anonymization conceptually, the operative articles lack precise standards for determining when data has been sufficiently anonymized to fall outside the regulation's scope.
This uncertainty creates substantial compliance ambiguity, particularly for researchers, health sector organizations, and companies developing data-driven services.
Germany proposes incorporating anonymization definitions into Article 4 GDPR and establishing whether the anonymization process itself constitutes "processing" requiring an independent legal basis.
Additionally, a recent European Court judgment clarifying that pseudonymization may achieve "relative anonymity" suggests opportunities for regulatory clarity that would align legal standards with technical capabilities.
Article 32 GDPR, establishing security requirements, currently mandates organizations implement "appropriate" technical and organizational measures proportionate to risk.
However, Germany argues organizations should retain discretion to adjust security measures based on context and legitimate consent rather than facing absolute prohibitions on lower-security processing. This risk-based flexibility could enable certain low-risk operations without the security overhead of high-value personal data processing.
Supervisory Coordination and Enforcement Structure
Germany's modernization agenda includes proposals to restructure data protection supervision. Rather than maintaining the current fragmented system where organizations must coordinate with individual state data protection authorities, the revised framework would establish centralized supervisory architecture with a single point of contact.
The Federal Data Protection Officer (Bundesbeauftragte für den Datenschutz und die Informationsfreiheit, or BfDI) would serve as the primary coordinating authority for organizations lacking establishment in specific German states.
This consolidation would provide organizations with substantially clearer guidance regarding regulatory expectations and enable more efficient investigation and enforcement procedures.
It would also create opportunities for more consistent interpretation of GDPR requirements across jurisdictions, reducing the current situation where different state authorities pursue divergent compliance priorities.
Implementation Status and European Coordination
Germany has transmitted its modernization proposals to the European Commission as contributions to the Commission's Digital Fitness Check—a comprehensive assessment of whether existing EU digital regulations adequately address contemporary business needs and competitive concerns.
The Commission has committed to examining these proposals as part of its broader reform initiative aimed at reducing administrative burdens by at least 25 percent across all companies and 35 percent for SMEs.
The DSK's formal resolution supporting the manufacturer responsibility approach provides institutional validation from the enforcement community.
Unlike previous conflicts between industry preferences and regulatory authorities, this proposal has generated consensus among German data protection authorities, strengthening its credibility in European discussions.
However, the manufacturer responsibility framework remains in the proposal stage. Implementation would require European Commission action, potentially through formal amendment of the GDPR itself.
The timeframe for such legislative action remains uncertain, though Germany has positioned the concept as a priority in the broader digital regulation modernization effort.
Implications for Product Development and Market Structure
The manufacturer responsibility framework, if implemented, would significantly reshape incentives within the technology sector. Product developers would internalize privacy compliance as a core design requirement rather than treating it as a post-deployment consideration.
This architectural shift could eventually create competitive advantages for privacy-respecting design approaches, potentially elevating privacy protections across product categories.
For organizations deploying standard solutions, the framework would substantially reduce compliance friction. Rather than conducting extensive independent assessments of mass-market software, organizations could rely on manufacturer compliance declarations and certifications.
This particularly benefits SMEs lacking dedicated data protection resources, enabling smaller organizations to utilize sophisticated software without disproportionate compliance overhead.
The framework also creates opportunities for specialized certification providers and compliance consultants to develop scalable assessment methodologies applicable across multiple manufacturers and products.
This could generate new business models focused on GDPR certification rather than the current remedial compliance consulting market.
