government cancels Verizon contract in wake of U.S.
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[June 27, 2014]
BERLIN (Reuters) - The
German government has cancelled a contract with U.S.
telecoms firm Verizon Communications Inc VZ.N as part of
an overhaul of its internal communications, prompted by
revelations last year of U.S. government spying.
Reports based on disclosures by former U.S. intelligence contractor
Edward Snowden alleged Washington had conducted mass surveillance in
Germany and had even eavesdropped on Chancellor Angela Merkel's
Berlin subsequently demanded talks with Washington on a "no-spy"
deal, but these collapsed after the United States appeared unwilling
to give the assurances Germany wanted.
Germany also launched an overhaul of its internal communications and
secure government networks. This is one of the first actions
involving a U.S. firm to result.
"The pressures on networks as well as the risks from highly
developed viruses or Trojans are rising," Germany's Interior
Ministry said in a statement on Thursday.
"Furthermore, the ties revealed between foreign intelligence
agencies and firms in the wake of the U.S. National Security Agency
(NSA) affair show that the German government needs a very high level
of security for its critical networks."
Verizon has been providing network infrastructure for the German
government's Berlin-Bonn network, used for communication between
ministries, since 2010, the statement said. The contract is set to
expire in 2015.
The government said Deutsche Telekom AG DTEGn.DE would replace
services provided by Verizon, and noted Deutsche Telekom was already
responsible for the most sensitive communications between ministries
or between the government and German intelligence agencies.
Information on the value of the contract was not immediately
According to reports and documents published last year, Verizon was
obliged to turn over international and domestic calling records of
its customers to U.S. intelligence agencies.
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Verizon is the second-biggest U.S. telephone company behind AT&T Inc
T.N in terms of revenue.
Detlef Eppig, head of Verizon's German unit Verizon Germany said on
Thursday: "Verizon Germany is a German company and we comply with
Verizon did not receive any demands from Washington in 2013 for data
stored in other countries, the company said.
"The U.S. government cannot compel us to produce our customers' data
stored in data centres outside the U.S., and if it attempts to do
so, we would challenge that attempt in a court," it added.
The firm declined to comment on whether there had been requests in
(Reporting by Thorsten Severin; Additional reporting by Marina Lopes
in Washington D.C.; Writing by Alexandra Hudson; Editing by David
Holmes and Eric Walsh)
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