German ISP and Telecommunications Company Raided Over Spy Scandal

The idea of a telecommunications company abusing its power to breach privacy has been anywhere from tossed around a few years back to an outright political battle as seen in the EFF warrentless wiretapping case today.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

If, however, one asks a German privacy advocate about ISPs illegally breaching privacy, there’s a good chance that the case front and center of their attention has nothing to do with China, the United States, DPI in Canada, or Phorm in Britain.

DW-World, a German news site that reports news in English, has been following a very interesting case in Germany since the 24th of this month. According to the reports, the story started with Deutsche Telekom, a German telecommunications company, being suspected of breaching privacy by wiretapping reporters whenever they communicated with the companies directors. The German media apparently have been following leaks that suggest that wiretap orders were ordered by senior executives. From the initial report:

Telekom said calls were not actually tapped, but the billing data had been illegally accessed in 2005 and “according to new claims” in 2006, too.

“We’re taking this very seriously. We have reported it to the public prosecutor,” chief executive Rene Obermann said.

In recent years German companies whose shares are traded in the United States have adopted the US practice of investigating and publicizing criminal actions within their own bureaucracies.

Two days later, the website reported that the head of the company, Rene Obermann, vowed to investigate the accusations.

Of course, already at this point, there were worries that customer information may have also been tapped. The company insists that customers privacy have been upheld and not affected by what has been happening. The company also said that if phone traffic was actually being monitored, there would be “harsh consequences” The accusations, according to Der Spiegel, a major German news source, were that phone calls were monitored, but not actually tapped. The company said that it woudl report to the From this report:

Numerous phone calls out of New York were also monitored, “Der Spiegel” reported. The New York-based Blackstone Group, a private equities firm, owns a significant stake in Deutsche Telekom, which is one-third state controlled.

The criminal inquiry, which has been handed over to public prosecutors, threatens to undermine relations with labor leaders at a point when management has been making massive job cuts in restructuring its domestic operations.

Max Stadler a parliamentarian and internal affairs spokesman for the opposition FDP, told the Frankfurter Rundschau newspaper it was “earth-shattering that a company that has a special responsibility for protecting private data” violated Germany’s data privacy laws.

It may be no surprise that the story is taking a life of its own by this point in time. A day later, the website reported that the accusations were confirmed.

“The special situation in Germany is that we have more and more cases where companies are watching their employees. In general, this isn’t a problem. Monitoring employees is allowed by law.” Thomas Hoeren, a professor in business, telecommunications and media law at the University of Muenster said during an interview in the report.

“But in this specific case at Deutsche Telekom,” he added, “they collected all the telephone data from their CEOs and the people supervising the company. This is not a simple violation of data protection or privacy regulations. It is a violation of telecommunications secrecy, which is protected under criminal law. Criminal prosecutors are now investigating the case.”

Hoeron also says that even if the phone calls weren’t tapped, but rather monitored, the people monitoring the calls become citizens, and thus, still break German law. Not only that, but the freedom of the press has, too, been violated. “[H]ere we do have a violation of press freedom because the press has the right to have contact to people, which is protected under the constitution. So it’s a double problem: on the one hand, the violation of telecommunications secrecy and, on the other hand, an implicit attack on freedom of press.” Hoeron says.

Hoeron said that problems will only expand for the German company. His prediction came true in a report just a day later where a former CEO, Kai-Uwe Ricke, who stepped down for tax evasion became implicated in the scandal. From the report:

Ricke told Handelsblatt that the accusations of his involvement were “false and unfounded” and a spokesman for Zumwinkel said he “did not give any personal orders or instructions” concerning the surveillance process.

However, according to the business daily, Ralf Kuehn, who heads the external company hired to examine the phone records, said that “the contract came from the highest level and was approved by the Telekom management.”

Klinkhammer, who was Telekom’s personnel manager from 1996 to 2006, was also quoted as saying that a fellow employee who’d handled the contract told him that “Ricke and Zumwinkel asked him to keep quiet about the matter.”

Public prosecutors in Bonn, where Deutsche Telekom is based, are set to decide this week whether the documents submitted by Telekom itself warrant an investigation.

With all this going on, it may be difficult to believe that the problems would escalate for the company – but they did. According to a report that was released yesterday, prosecutors in the spy scandal case raided the offices of Deutsche Telekom, which is Europes biggest telecommunications company. From this latest report:

In addition, labor representatives on Telekom’s supervisory board also said on Thursday that they were pressing charges against Europe’s largest phone company for serious breaches of privacy and trust.

“We want to contribute to the clarification of the affair and at the same time to protect the reputation of the company,” said Lothar Schroeder, vice president of the supervisor board.

The report says that the company only tracked one media firm – Capital. Meanwhile, the report also contains the following:

on Thursday, another business newspaper, Financial Times Deutschland alleged it was a victim of espionage by Deutsche Telekom several years earlier. The daily said Deutsche Telekom had hired private detectives to spy on its reporters in 2000 and had even secretly filmed the newsroom.

“Their main target was the FTD’s chief reporter at the time, Tasso Enzweiler, who often broke stories about the telecommunication sector,” the paper said. “The private detectives even used a hidden camera to try and get information about Enzweiler’s source from the news room in Cologne.”

The reports may add a very interesting dimension to the debates on privacy in other countries as well. In the United States, the EFF and many others are suing AT&T, the US’s biggest telecommunication companies. The current governing party in the US is currently trying to put put in legislation that would grant immunity for the corporate giants.

Recently, the governing party, the Republicans, offered a “compromise” where the people suing would have their day in court – in a secret court. The EFF blasted the report saying that the compromise is still immunity. The EFF is also saying that there shouldn’t be any “compromises” because the actions to do mass wiretapping was illegal.

US presidential hopeful John McCain is being watched over what he says on the case and, according to EFF, is “not giving straight talk” on the issue.

What the German case may offer is a very good case on whether or not a telecommunications company would abuse its power over their network. Obviously, this case already seems to show that there is a very clear cut example of such a company doing precisely this. It’s also very apparent that the German company doesn’t necessarily help give telecommunications companies a very good name either. Either way, there are certainly dramatic things going on in the privacy debates in Germany.

Drew Wilson on Twitter: @icecube85 and Google+.

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