Germany To Demand Tech Firms' Source Code

Software (Xetra: 330400 - news) developers who supply products to the German government or companies critical to its infrastructure could be forced to hand over their top-secret source code.

Source code is effectively the building blocks of software which tech firms jealously guard to avoid companies copying their products.

As a result, if the draft legislation becomes law, many companies from outside Germany would likely refuse to compete for technology contracts in the country.

Germany is Europe's largest market for information technology and communications, meaning firms could miss out on contracts worth billions.

Back in July, Russia demanded access to Apple (NasdaqGS: AAPL - news) 's source codes to guard against spying by foreign governments.

The move was seen as excessive by some, but Germany's proposals go much further.

The new bill has been proposed in the name of state security, and is expected to become law.

Social Democrat Gerold Reichenbach said: "We cannot afford to be open to attacks on our economy," adding that the law would "help prevent espionage, wherever it comes from."

In April, the German government tried and failed to win assurances from the US that it would not spy on its ally .

It has since ended a contract with US telecoms firm Verizon (NYSE: VZ - news) because of security concerns, and said the Google (Xetra: A0B7FY - news) could be broken up and regulated like a utility due to its dominance.

The American Chamber of Commerce in Germany has warned that the country will fall behind technologically if the proposals are approved.