German government drops Verizon

Two weeks after announcing an investigation into eavesdropping allegations made by Edward Snowden regarding the US National Security Agency (NSA), the German government drops Verizon as a service provider. The contract, which was due for renewal in 2015 will be phased out.

The US company has been providing network infrastructure for the Berlin-Bonn network of the German government. The German government has not suggested that Verizon was guilty of anything.

Verizon, the second largest telecom company in the US, provides internet services to several government departments in Germany. There is growing concern globally that American companies might be supplying US authorities with data.

After hearing about Snowden’s revelations in 2013, the German government demanded talks with the Obama administration seeking a “no spy” deal. However, the talks fell through because the US was unable to provide Germany with the assurances it sought.

Angela Merkel’s phone-tapping investigation

Earlier this month, Germany’s federal prosecutor, Harald Range, announced that he was opening an investigation into the alleged tapping of Chancellor Angela Merkel’s mobile phone by the NSA. Mr. Range said “I informed parliament’s legal affairs committee that I have started a preliminary investigation over tapping of a mobile phone of the chancellor.”

German government drops Verizon

German Chancellor, Angela Merkel, who is known to use her mobile phone a lot, was furious when she found out that an American agency had tapped it.

The federal prosecutor wants to determine whether Mrs. Merkel’s phone was monitored by default or automatically. The US government has implied it was an automatic procedure that had included many other people, but the German tabloid Bild says individual agents were actively tapping her calls.

According to section 99 of the German criminal code, if active surveillance carried out by individual agents had occurred, it would be “in clear breach of German law on German soil.”

German government needs security

According to Tobias Plate, the German Interior Ministry spokesman:

“There are indications that Verizon is legally required to provide certain things to the NSA, and that’s one of the reasons the cooperation with Verizon won’t continue. Furthermore, the ties revealed between foreign intelligence agencies and firms in the wake of the US National Security Agency affair, show that the German government needs a very high level of security for its critical networks.”

Mr. Plate added that Verizon does not provide services to its ministries or security agencies. He expects Parliament will also stop dealing with Verizon.

Germans, with their experience with Communist and Nazi dictatorships, are extremely sensitive to news regarding phone-tapping and spying on its citizens.

US telecom companies struggling abroad

American telecom providers, like Verizon and the search engine giant Google have been trying hard to demonstrate that they don’t/didn’t actively participate in the covert activities.

The European Union’s (EU’s) telecom companies have jumped on this growing resentment and fear regarding privacy by emphasizing that they comply with the region’s strict data protection regulations in the hope of gaining an edge over their competitors across the Atlantic.

Phone giant Deutsche Telekom, a Verizon rival, will take on the services that the American company has been supplying to the German government. Deutsche Telekom already supplies services for the most sensitive communications between the government and intelligence agencies and between ministries in Germany.

American companies may start wondering whether the German government’s cancellation of the Verizon contract is the beginning of many more in the EU because of the scandal.

The Wall Street Journal quoted Brad Smith, Microsoft’s General Counsel, who said that business troubles associated with the fallout from the Snowden leaks were “getting worse, not better.”

According to AT&T executives, foreign customers are being approached by non-American rivals urging them to use non-American companies.

US companies trying to dispel myths

In a statement on Thursday, Verizon said its operations in Germany adhered to German protection regulations.

Detlef Eppig, Verizon Germany’s managing director said:

“We have made it clear that the U.S. government cannot access customer information that is stored outside the United States.”

According to reports based on Snowden documents that were published last year, under a secret court order Verizon was supplying the phone records of millions of American customers to the NSA.

Edward Snowden

Edward Snowden’s revelations not only caused the US government enormous embarrassment, they have also undermined US telecom and tech companies’ ability to do business abroad.

In January this year Verizon published a transparency report in which it outlined the number of law enforcement requests it received for customer data. The report also showed that no demands were made by US authorities regarding customer data stored abroad in 2013. Through a Verizon Policy Blog, it tried to dispel the myth about the US government is using cloud servers abroad to spy on people around the world.

The US and the EU are in talks to create the biggest free-trade area in the world – the Transatlantic Trade and Investment Partnership. By saying it has a preference for home-based telecom providers, Germany is running against the spirit of the partnership.

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