Federal Network Agency to become AI watchdog

28.08.2025

Source: E & M powernews

The Federal Ministry of Digital Affairs wants to implement the EU AI Regulation. In a draft bill, it makes the Federal Network Agency the central supervisory and funding authority.

The Federal Ministry for Digital and State Modernization (BMDS) has presented a draft bill for the implementation of the European AI Regulation. According to the draft, which is available to this editorial team, the Federal Network Agency will be given a central role. The authority is to be responsible for market surveillance of artificial intelligence (AI) applications and will also perform funding tasks.

EU Regulation 2024/1689, also known as the AI Act or AI Regulation, came into force on August 1, 2024. It creates a uniform legal framework for the development and use of AI systems in the European Single Market. According to the EU, the legal framework is intended to promote innovation while ensuring high standards of protection for health, safety, fundamental rights and the environment. Key elements include bans on certain practices, requirements for high-risk systems and transparency obligations. The requirements will be binding throughout the EU from August 2026.

To ensure that Germany implements the requirements on time, the BMDS envisages setting up the Federal Network Agency as the central market surveillance authority. In addition, it is to operate one or more real-world laboratories in which companies can test AI applications. According to the draft, small and medium-sized enterprises (SMEs) and start-ups based in the EU in particular are to be given access to these facilities.

An Independent AI Market Monitoring Chamber (UKIM) will be created for monitoring purposes, which will be organizationally subordinate to the Federal Network Agency, but will have its own office. It is to report annually to the Bundestag on developments and risks in the field of AI.

129 new posts

The BMDS is planning additional personnel and financial resources for implementation. Specifically, the Federal Network Agency is to receive 129 new posts. For this, the ministry estimates ongoing personnel costs of 9.8 million euros per year as well as other material and overhead costs.

In addition, there will be one-off investments of around 3 million euros for IT systems as well as ongoing expenses of 6.3 million euros per year, including for the operation of a real laboratory and the development of a digital registry.

Part of the expenditure could be refinanced through fees or fines, according to the draft. However, this revenue flows directly into the federal budget and is not directly available to the Federal Network Agency. The additional posts are therefore to be financed via the general budget.

Within the EU deadline

The legislative process is necessary because the EU regulation requires member states to designate national AI authorities by August 2025 at the latest. In addition to the Federal Network Agency, further coordination with institutions such as the Federal Financial Supervisory Authority (BaFin) and the Federal Office for Information Security (BSI) is planned.

Practical real-world laboratories will enable companies to identify the opportunities and risks of AI applications at an early stage. This should lower barriers to market entry and support innovation.

Association wants less bureaucracy

The German Association of Energy and Water Industries (BDEW) welcomes the timely implementation of the EU requirements. Digitalization is a key driver for the energy transition, for example with the use of smart metering systems, AI applications, smart grids, digital twins and virtual power plants, as well as process automation and networked data ecosystems.

BDEW Managing Director Kerstin Andreae issued a general warning: "Regulations that slow down digital innovations at national or European level should be critically reviewed." Innovation, economic efficiency and security of supply could only be reconciled if bureaucratic hurdles were removed while maintaining high security standards.

The German government should push ahead with digital legislation at EU level, she demanded. For example, potential for simplification and standardization should be leveraged in the "Omnibus IV Simplification Package". The costs and benefits should be carefully weighed up. The principle of "he who orders, pays" should be maintained and digital platforms or processes should be developed in close coordination with the industry, Andreae said.

Author: Susanne Harmsen