The government of Germany has dropped its contract with Verizon Communications as it overhauls its internal communications systems and secure networks.
The overhaul was spurred by the revelations of former CIA systems administrator Edward Snowden last year, which accused the United States and British governments of performing electronic espionage.
The German government will transfer all its internal communications from Verizon as its service provider to Deutsche Telekom at the end of next year. While the communications contracts of the government were already under review, concerns unleashed by Snowden's revelations on electronic espionage by the U.S. National Security Agency prompted the decision to not renew the contact with Verizon.
One of Snowden's allegations was that the United States government performed mass surveillance operations in Germany, including listening in on the calls made and received by Chancellor Angela Merkel on her mobile phone.
After the allegations were made public, Berlin demanded for a discussion with Washington regarding a "no-spy deal" that would eliminate all forms of espionage between the two countries. The discussions, however, fell through when the United States government did not give enough assurances on the demands of the German government.
"The pressures on networks as well as the risks from highly developed viruses or Trojans are rising," the Interior Ministry of Germany said in a statement.
"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."
The decision of Germany to drop its Verizon contract shows the damage being done by NSA's espionage activities on the international business of U.S. companies. Verizon's contract with the German government was signed in 2010, with the company given the task to provide Internet access to several federal agencies in Germany along with helping run the Berlin-Bonn network that links the agencies together.
Last month, John Chambers, CEO of Cisco Systems, warned President Barack Obama that reports revealing NSA's actions of placing surveillance tools within U.S.-made networking tools may dampen sales. Companies such as Microsoft and Hewlett-Packard have also expressed their concern that fears of spying may decrease the growth of new online technologies and services such as cloud computing.
Snowden is currently in Russia after going to the country to seek asylum, and is now stranded there after the United States government cancelled his passport. A former KGB officer said that the Russian government is now "extracting all the intelligence he possesses."
