2 min

Bad memories of state overreach plus recent court rulings make some states rethink using the software.

Some state governments in Germany are rethinking how their police forces use software made by Palantir, according to a report in the Financial Times. The concern stems from privacy concerns and comes just as Palantir is struggling to expand its European business, FT says.

The states of Bavaria and North Rhine-Westphalia both told the Financial Times that they are reviewing use of Palantir’s software after a ruling made last month by Germany’s Federal Constitutional Court saying that laws allowing the use of data mining by police forces were too broad and infringed on individuals’ privacy. That ruling was against the states of Hesse and Hamburg and has already forced police forces there to restructure their use of software made by Palantir.

The about-face of the German states has dealt a blow to the 16 billion euro data analytics company, which was co-founded by Peter Thiel, a prominent figure and billionaire tech investor in the US.

Based in Denver, Colorado, Palantir is best known for its contracts with US governments, defense and security organisations including the CIA. The company has sought to grow in Europe using the same business model, concentrating on recruiting governmental clients. For example, the FT reports that Palantir is the frontrunner for a forthcoming £400 million (€453 million) data contract with the UK’s National Health Service (NHS). The company’s client roster also includes the Danish police and the law enforcement agency Europol.

Germany’s history drives anti-surveillance sentiment

Palantir’s government contracts business makes up over half of its revenue, according to FT. Currently, over three quarters of that business comes from the US, but growth in that sector has slowed from 47 per cent in 2021 to 19.5 per cent in 2022. The company is thus trying to buttress that growth by going after the EU government sector.

Unfortunately for Palantir, Germany may not be the ideal environment in which to sell its data analysis tools for police applications. There, mistrust of state surveillance is deep and wide, given the histories of the Stasi secret police and Hitler’s Gestapo.

German police forces have said they intend to continue using Palantir’s software, but resistance from privacy advocates in Europe has hampered Palantir’s efforts to expand into the public sector. Alex Karp, Palantir’s German-speaking CEO, said in a February earnings call that Europeans are “a lot less friendly to new innovations”.

In Germany’s case, it could be that they want to avoid going ‘back to the future’.

Also read: AWS announces Modular Data Center for US Defense Department