A national row has erupted yesterday in Germany after Deutsche Telekom said it had secretly tracked thousands of phone calls made by its supervisory board members. According to a report in today's New York Times, Deutsche Telekom said there had been "severe and far-reaching" misuse of internal data being passed on to reporters.
The spying came to light on Saturday when Der Spiegel newspaper reported that Deutsche Telekom had asked the authorities to act on the information its own investigation had unearthed in 2005 and 2006. This was a difficult time for the incumbent, when it shed many jobs in successive tranches.
The case ostensibly has much in common with that at Hewlett-Packard where board members were investigated by a private detective to discover who was leaking information to the outside world. However, there are several big differences too.
To begin with, it is a legal requirement that the company's board is evenly split between representatives of shareholders and employees.
Secondly, the German government holds a controlling 32% stake in Deutsche Telekom, so it is directly implicated. The New York Times said the government had described the spying operation as a "serious breach of trust".
Thirdly, privacy issues are very hot potato in Germany in the wake of what many people suffered at the hands of Nazi and Communist regimes, where citizens were spied on, arrested and murdered with impunity.
Fourthly, this latest revelation ties into other state spying episodes: the federal intelligence agency, the BND, has been under scrutiny since it was accused of spying on journalists in 2006 and then the government confirmed that the BND had paid an informant more than â‚¬4 million for a disk containing stolen information about hundreds of Germans who were evading tax by banking in Liechtenstein.
The Liechtenstein sting led to the arrest of Klaus Zumwinkel, the former chairman of Deutsche Telekom's supervisory board.
The Deutsche Telekom scandal also follows hard on the heels of criminal charges being brought against two other iconic Germany companies: Siemens is being investigated for bribery and Volkswagen is accused of paying off union representatives.
Finally, attempts by the German government for the right to conduct secret online searches of suspected terrorists are likely to meet even tougher opposition after this latest development.