U.S. Markets closed

SAP rejects calls for a pan-European IT champion

CEO of German software group SAP Jim Hagemann Snabe attends the company's balance sheet news conference in Frankfurt January 25, 2012. REUTERS/Lmar Niazman

FRANKFURT (Reuters) - Germany's biggest tech company, SAP, has rejected calls by domestic politicians for European IT firms to band together to better compete against U.S. tech groups in the wake of spying allegations.

Some German politicians have suggested an IT industry equivalent to European jetmaker Airbus following allegations about U.S. spying on Europeans, including the monitoring of German Chancellor Angela Merkel's mobile phone.

"A merger between some European IT companies with the aim of drawing a line between them and the rest of the global market, does not make any sense," SAP co-Chief Executive Jim Hagemann Snabe said on Wednesday, in an e-mailed response to questions from Reuters.

"Such an endeavor would be doomed to fail from the outset," he said, adding it would lead to less competition, less innovation and less growth in a globally-focused sector.

Government snooping is a sensitive subject in Germany, which has among the strictest privacy laws in the world, since it dredges up memories of eavesdropping by the Stasi secret police in the former East Germany.

German politicians in favor of IT companies teaming up, such as Merkel, argue it would make Europe less dependent on U.S. technology and data groups including Microsoft, Google and Cisco.

It would copy the success of planemaker Airbus, part of European group EADS, which compete head-to-head with U.S. rival Boeing in the global aerospace market.

Hagemann Snabe said Europe's IT sector needed to promote competition and foster young talent. "This way we will create the next generation of young IT companies in Europe, thus ensuring growth and progress," he said.

While some of SAP's U.S. rivals have said they were expecting setbacks from the spying allegations, SAP said the current debate around privacy in Europe is helping its business.

Still, the company will not proactively launch a campaign as it does not want to offend its U.S. customers.

Hagemann Snabe made a plea for international standards for data protection both in Europe and the United States, echoing European telecoms commissioner Neelie Kroes.

The European Parliament's civil liberties committee recently voted for a tougher data privacy regime in Europe.

That vote cleared the way for negotiations with member states, with the aim of having a new code of conduct agreed by May next year, the first fundamental updating of Europe's data protection laws since 1995.

(Reporting by Ilona Wissenbach and Harro ten Wolde; Editing by Christiaan Hetzner and Mark Potter)