This has nothing to do with the speech clampdown, but the general gist of it is true. Most of the cases "cited" by the Telegraph article are several years older than the recent decline in industrialisation.
I put cited in quotes, but it's the usual misinformation bullshit. Niehoff never had his home raided. Two duty officers went to his house to execute a search warrant but on discussion with Niehoff just aborted the warrant realising it was issued for someone who wasn't a threat. Also the reason for the warrant was that Niehoff used far right hate symbols, it's just the shock media who reported it was due to calling the minister a dummy.
The lying fritz story is true, but it deeply divided the country and quite a significant portion of the political spectrum want the law abolished. The problem is the law was created in response to a politician being assassinated.