There is concern in Germany that U.S. firms provide data to authorities, and anger over allegations that conversations on the telephone of German Chancellor Angela Merkel were intercepted by the U.S. National Security Agency. The phone-tapping claim was made by former NSA contractor Edward Snowden, and earlier in June, Germany announced a formal investigation of the allegations.
"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 U.S. National Security Agency affair, show that the German government needs a very high level of security for its critical networks," said Tobias Plate, Germany's interior Minister.
Verizon has contracted with several German government agencies to provide Internet services. The contracts expire in 2015.
There has been no accusation of involvement, on Verizon's part, in the phone-tapping controversy, but U.S. technology firms doing business in Germany have been subject to increased scrutiny and suspicion.