Selbstverständlichkeiten

Things that go without saying.

The supreme court in Karlsruhe [Bundesgerichtshof] said companies may not make ads praising themselves for doing things they’re required to do by law.

A lower court had decided the ads were okay because the “money-back guarantee,” which German law required of these companies anyway, wasn’t particularly emphasized in the ads in question. The Bundesgerichtshof disagreed. It doesn’t take much emphasis to mislead consumers, said the Bundesgerichtshof.

(ZELBST fair SHTENNED lichh kite en.)

Verbraucherschutztag-Vortrag

Address to the German Data Protection Conference.

On 03 Jun 2013, F.A.Z. feuilleton publisher Frank Schirrmacher gave a talk titled “Information as a fetish: Consumer protection in the new information economy” at Germany’s national Data Protection Conference. Some of his thoughts:

“Data protection in the information economy will become a job that is very politically important. It will have… to develop into an instrument that secures freedom.”

“It’s become normal for us, we journalists and you [data protection officers] too, some of you, to talk about spying. About spying on people in every possible way in the internet. About tracking, about data hunters and data kraken. It’s no accident that we use all this vocabulary from intelligence services and spy agencies. In this sense, data protection must be intelligent counter-intelligence. It must disclose the operational and systemic rationality of the algorithms, so people can understand at all what texts are being written elsewhere about their lives and what conclusions can be drawn from those texts. … We must thus end a kind of illiteracy about these matters.”

He said today’s situation isn’t Orwellian because Orwell described an open suppression system. It’s more Brave New World: “In Orwell they burned books; in Brave New World books just aren’t read.”

“Data protection in our world’s future will have the actual task of becoming personality protection. The inviolability of the person, which all of us believe in as a basic principle, presents completely new challenges in a digital age. To quote again from Eric Schmidt’s book, and he is entirely right about this, when he writes, ‘Identity,’ in other words personality, ‘will be the most important raw material for burghers of the future, and identity will primarily exist online.'”

“Consumers don’t just buy a product. …They are actually becoming products. …They are read when they buy things, they are read when they move around, they are even read when they are reading, paying, even thinking as we now know. …In the age of ‘big data’ everything has the potential to be a market, including politics and social life. When even the most private acts, as is possible today, make people into market participants, such as reading an ebook, then conversely it’s clear that even the most private space can become the object of market research, and increasingly at a stage before the consumer is aware of it.”

He said we can’t go back to analog. We can’t switch the tracking off either. Even if we manage to not be recorded by our own devices, other people’s devices are recording us. Also, some companies keep lists of everyone who chooses to opt out.

The question of anonymity is in many cases already over because of the patterns that can be spotted now (last year): so many behaviors can be a fingerprint or a voice print. Consumers must learn what patterns of theirs are being read.

Proposals:

  • “The question of how to handle data I think must be anchored in our society as firmly as the status of a physician’s confidentiality and responsibility. We know that a huge number of people are being educated for big data, who will evaluate these data for companies. On the whole, we need in our society an awareness that these data are a judgment about personality. Whether a consumer will get a loan, has a future at his job, etc.”
  • “We need what the Americans call ‘external algorithmicians.’ Meaning, we can’t all understand what’s going on there. So, as was the case for nuclear power for example, scientists will have to verify, from the other side so to speak, what’s working and what isn’t working. Or Stiftung Warentest, the consumer testing magazines, who use their fantastic technical expertise in counter-intelligence, so to speak. That’s what I mean by counter-intelligence: countercheck how a system is functioning. And we need this for algorithms too. We will need people who are capable, if it’s possible at all, of decoding these algorithms and then telling people, okay. If you just spent ten days messing around on Facebook, you can assume that this and this are now known about you.”
  • “Finally, at the European level: We are all seeking a vision for Europe. We can see that in the information economy, together with globalization, two supersystems are arising. Of course the U.S.A. on the one hand, and the second one is Asia, especially China. Europe is looking so hard for its own task, vision and identity. We have a different history, after all. Admirers of Silicon Valley should always be told that it was subsidized by the state for decades. Into the 1980’s. Silicon Valley did not arise from entrepreneurship alone. In that sense, one should ask whether we want to continue to make ourselves dependent on systems that exclusively come from the U.S.A., or whether we in Europe might not also want to use government subventions… whether we might not want, as some other countries are doing, to build up our own search engine, our own social networks, which would have the advantage that they could be new designs.”

 

(Fair BROW chh ah shoo uts tah chh   FORE trah chh.)

Datenjournalismus

Data journalism.

Germany has thousands of gas stations that tend to be owned by only a handful of chains affiliated with the world’s major oil companies. For years, people accused German gas stations of raising fuel prices right before weekends and holidays and especially holiday weekends, in concert, yet no one could prove collusion. So the government created the Market Transparency Office for Fuel. In 2013, the Markttransparenzstelle began requiring German gas stations to communicate their fuel price changes in real time, and then it broadcast the data to companies whose phone apps let consumers quickly and easily compare gas prices at the closest gas stations.

Süddeutsche Zeitung has now taken four weeks of gas price data from one of the larger phone apps and combed through the information looking for patterns in what they’re calling a “data journalism” investigation. They’ll be publishing their findings in a series of articles.

Update on 16 Apr 2014: Some immediately obvious outliers turned out to be caused by gas stations that were sending in prices without decimal points, or e.g. one was submitting the price “9999.” S.Z. said the system still doesn’t have a way to check whether the numbers submitted by gas stations are truthful. Currently consumers are to send complaints about incorrect price data to the phone app companies.

S.Z. said they too can’t prove collusion. But some gas station chains are more expensive (the chain with the highest fuel prices said it’s because their fuel is such high quality). Some chains are big enough that their price changes move the market, with smaller chains changing their prices after a bigger chain does so.

The lowest fuel prices tended to be in areas with dense populations.

One gas station chain tends to change its fuel prices >13 times a day, another only 9 times a day. Both are very likely to change fuel prices between 7 and 8 p.m., while several other chains are very likely to change prices between 9 p.m. and midnight. Apparently until this report was published the cheapest time to refuel was between 5 and 7 p.m., with fuel prices rising steeply after 8 p.m.

Update on 17 Apr 2014: The chain with the most gas stations in Germany has the highest fuel prices in Germany, in the data set the Süddeutsche Zeitung examined. The chain with the second-highest number of gas stations has the second-highest fuel prices. S.Z. said the ratio holds true for four other large “A brand” chains.

“B brand,” cheaper and smaller, gas station chains tend to use a strategy of selling fuel at prices only perhaps two eurocents below the prices of the closest “A brand” gas stations but the new pricing data shows that their prices average four to five eurocents below the A brands’ when looking at Germany as a whole. The C.E.O. of one of the fuel price phone apps said, “The strategy of the B brands is actually: one or two cents cheaper is okay, that won’t start a price war.”

Germany also has many gas stations not affiliated with the large oil-company chains, but the current database groups independent gas stations in the same category as ones that belong to a large non-oil company such as a chain of car washes or supermarkets. The larger category of independent gas stations plus gas stations belonging to non-oil-company chains had higher average fuel prices than the B brand gas stations, yet S.Z. said “a look at the data” showed that in fact car wash and supermarket chains sell the cheapest fuel, because they’re hoping customers who arrive to buy gas will stay to wash cars or buy groceries.

Austria is trying to regulate gas stations’ pricing to benefit consumers more by mandating that gas stations there can only change fuel prices once per day, at noon. It’s not known whether the advantages of this model will outweigh the disadvantages: German and other officials are watching to see how the experiment works out.

(DOT en jure nah LIZ moose.)

NSA-Untersuchungsausschuss

N.S.A. investigative committee of the Bundestag, which began meeting on 03 Apr 2014.

The committee’s chair is Clemens Binninger (C.D.U.), a former policeman.

It is tasking itself with investigating the involvement of German police and intelligence agencies—domestic, foreign and military—in the massive spying on people and companies that is now known to have been done by the U.S. and U.K. governments and their contractors.

Also it will now be investigating Germany’s culpability in the U.S.’s drone wars. Since the Süddeutsche Zeitung, Norddeutscher Rundfunk (NDR) and Westdeutscher Rundfunk (WDR) reported that the U.S. is using its Ramstein airbase inside Germany to support drone attacks in Somalia, Yemen and Pakistan, violating international law while killing hundreds of civilians, Germany’s government (C.D.U./C.S.U. + S.P.D.) can no longer pretend they don’t know this is happening.

The committee repeated that they would like Edward Snowden and other informed whistleblowers to give statements and answer questions for these Bundestag inquiries. Journalists repeated that the whole world will be watching this inquiry to see what the committee discovers and which stones they leave unturned.

Update on 09 Apr 2014: Clemens Binninger stepped down as chair of the N.S.A. investigative committee after only six days. He said he was resigning from the position because he felt people from the opposition parties were too interested in hearing from N.S.A. whistleblower Edward Snowden.

Update on 10 Jul 2014: A Spiegel article about Germans’ angry responses to spying by the U.S. mentioned that Clemens Binninger is chairing the Parlamentarisches Kontrollgremium, the secret Bundestag committee supposed to monitor Germany’s intelligence agencies.

(Enn ess ah   oon tah ZOO chh oongs OW! ss shoes.)

„Zum Schutz des Kundenerlebnisses“

“To protect your customers’ experience.”

Süddeutsche Zeitung’s translation of part of the C.E.O. of Netflix’s carefully formulated blog post carefully indicating that Netflix now has to secretly pay off countless intermediaries in the U.S.A. between its streamed content and its paying customers. If Netflix has to do this, presumably the other content providers do too, including companies too small to afford it. Netflix’s customers are also paying off some of the same intermediaries—a very small number of them—in order to get internet access.

The squeeze on content-providing companies apparently includes use of the following loophole: U.S. internet providers are claiming network neutrality while selling content providers more-direct inputs into their pipeline. It appears from the S.Z. article that U.S. internet providers are saying everything leaves their boxes at the same speed; they merely receive some folks’ data more indirectly than other folks’ data. Pay them off and your content won’t bounce through as many service providers [Dienstleister] before it has been officially received.

The squeeze on internet content consumers: One third of all American consumers have only one internet provider to choose from, the Süddeutsche informed its readers, and another 37% have only two providers. In the technology Hochburg known as Seattle: perhaps 2.3. Earlier this year Seattle’s new mayor canceled the city’s plans to build municipal broadband, and my I.S.P. almost doubled my bill shortly afterward.

Apparently groups who are partially responsible for the inadequacy of broadband infrastructure construction in the U.S. can use this dearth to extract more money which they use to further impede broadband construction. And the agency nominally in charge, the F.C.C., seems to keep restricting its own ability to regulate.

(Tsoom   SHITZ   dess   CUNNED en eah LABE niss ess.)

„Bad Pharma“ wird besser!

“Bad Pharma” is getting better!

After much debate, Brussels agreed on European drug law changes, effective in 2016. To improve transparency and safety, pharma studies in humans will have to publish all results, including negative findings.

As Ben Goldacre explained so lucidly in Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients, scientists’ and study sponsors’ tendencies to only publish findings that are interesting and/or support certain types of conclusions have skewed drug licensing and killed people.

(Bod   FAW mah   vee awed   BESS ah.)

Möglicherweise bevorzugt behandelt

Possibly gave preferential treatment.

Hedge funds, unlimited short selling and now high-frequency traders have been for some time a regular source of concern for financial consumer protection advocates in Germany. The Frankfurter Allgemeine Zeitung recently reported on high-speed automated trading-related investigations that diverse U.S. financial regulators at various levels are making.

  • The F.A.Z. said the U.S. Securities and Exchange Commission is investigating whether certain software programs might accelerate transactions for some traders and not others.
  • The state of New York’s attorney general, Eric Schneiderman, accused U.S. stock markets of using computer hardware to give speed advantages to high-frequency traders, to the detriment of private investors. He said the markets are letting high-frequency traders set up their computers inside the markets’ data centers and giving them access to “ultrafast” cables connecting to the markets’ networks.
  • The U.S. Commodity Futures Trading Comission is investigating “complex agreements between so-called high-frequency traders and the [Terminbörsen: derivative exchanges, or futures markets] Chicago Mercantile Exchange and Intercontinental Exchange. The agreements have to do with rebates for the execution of stock orders.”

Last month the company Business Wire, which the F.A.Z. said is a competitor of Marketwired and a subsidiary of Berkshire Hathaway, agreed to stop providing similar services. Warren Buffet stopped the practice working with Eric Schneiderman after it was found that high-frequency traders had been able to obtain these data directly from Business Wire, rather than via the official route through high-speed subscriptions to intermediary news agencies such as Bloomberg, like everyone else.

A data specialist firm called Nanex said a 100-millisecond difference in publication delivery of a company’s press statement had at least once sufficed to earn a profit of US$800,000.

In a related F.A.Z. op-ed, the author commented that the S.E.C. in Washington, D.C., should have been doing much of this regulatory work, but lately Attorney Schneiderman has been “making them legs.”

Update on 03 Apr 2014: One of many interesting responses to Michael Lewis’s 60 Minutes interview about his new high-frequency trading book, Flash Boys, said the relevant wireless connections are faster than fiber optic connections.

The F.B.I. said it too is investigating.

(MIG lichh ah VISE ah beh FORD sooked beh HOND alt.)

Mietpreisbremse promulgieren

Promulgating a brake on apartment rents.

New Justice Minister and Consumer Protection Minister Heiko Maas said he will take steps to counteract the rising rents in Germany. This was also agreed in the new government’s coalition agreement negotiated between the three ruling parties, C.D.U., S.P.D. and C.S.U.

Under the new rules, new tenants’ rent could not exceed 110% of the previous tenant’s rent. Fees for agents who find the new renters will in future be paid by landlords, not tenants. These rules will go into effect in 2015.

(MEAT price bremz ah prom ool GEAR en.)

Energiewende-Bremse protestieren

Protesting a brake decelerating the Energiewende, Germany’s switch to renewable energy sources and more energy independence.

Tens of thousands of people protested creatively in several German cities on 22 Mar 2014 because they are afraid the new oppositionless grosse Koalition government wants to slow down Germany’s switch to solar and wind power, and delay the shutdowns of coal and nuclear power plants. Protesters interviewed said governments should speed up the switch to renewables, not slow it down.

The first draft of the new coalition’s Energiewende reform is supposed to be ready in early April 2014.

(En nog EE venned ah   bremz ah   pro tess TEA ren.)

Doktrin der Dritte

“Third-party doctrine.”

An interesting loophole in the few privacy protections U.S. Americans and their customers think they have. Any information you have deliberately shared with a company is no longer protected against “unwarranted search and seizure” by the U.S. government. Does this also apply to information you have inadvertently shared with a company?

(DOCKED rin   dared   RITT ah.)

Den Schluss schmeissen

Foreigner German for “banging the close.”

Banging the close was one of two unethical things several currency market traders said they could do to game exchange rates because a handful of large banks controlled half the market, according to a June 2013 article in FAZ.net. Traders at the big banks could input trades before and after a huge trade’s 60-second window and have an effect on the rate, despite the fact that “The benchmark exchange rates are based on actual transactions and not on banks’ estimates like the L.I.B.O.R. reference rate is.” The second thing was to arrange their day’s work around a pending large trade; they would get a poorer exchange rate for the client in order to buy back her sold currency more cheaply than would have been the case.

The June 2013 article also said authorities were investigating benchmark manipulation in crude oil and swap markets.

(Dane   SHLOOSS   shmigh sen.)

Direktbank

A new type of bank apparently that doesn’t spend a lot of money on brick-and-mortar branches. Direktbanks use the internet and provide interest advantages. ING-Direktbank, the German subsidiary of the large Dutch bank ING, is the first major bank in Germany to eliminate overdraft interest rates for the standard giro accounts everyone uses in lieu of checking. Overdrafts there will now be charged the bank’s normal interest rate for short-term small loans [Dispokredit or drawing credit], which they also lowered from 8.5% to 7.95%. The eliminated overdraft interest rate had been 12%; other German banks are still charging up to 18% on overdrafts. The European Central Bank’s prime interest rate is currently 0.25%.

Spiegel.de said that last year ING-Diba acquired half a million new customers. That was before they eliminated overdraft interest and other banks didn’t.

The bank’s top German executive also proposed that a [neutral, reliable] central authority should publish a list of all short-term credit and overdraft pricing schemes offered at all German banks. Perhaps the Stiftung Warentest could do it, he said, mentioning a product-testing foundation that has the reputation of Consumer Reports in the U.S.A.

Update on 21 Apr 2014: A Spiegel.de article said some smaller banks were first to end overdraft interest rates on giro accounts but it didn’t list them. The article was in praise of another bank of the Genossenschaftsbank type (a mutual?) which reduced the highest interest rate on one type of extreme overdraft.

(Dear ECKED bonk.)

Medienkompetenz

Media competency, one of many areas speakers celebrating
Safer Internet Day on 10 Feb 2014 said should be strengthened in children and young people by increasing discussions, by what sounds like awesome classes already being taught in some schools, by working together with state broadcasting corporations, by strengthening data protection laws and by improving consumer protection laws, said ARD tagesschau.de, the new families minister Manuela Schwesig (S.P.D.) and the new justice minister & consumer protection minister Heiko Maas (S.P.D.).

(MAY dee en com pet TENCE.)

Verbandsklagerecht der Verbraucherschutzorganisationen

Right for an association to file suit, for consumer protection organizations.

The new justice minister and consumer protection boss, Heiko Maas (S.P.D.), said he is thinking about making it possible for consumer protection organizations to file lawsuits on behalf of consumers in response to data protection violations.

Currently, consumer protection organizations in Germany can only file data protection lawsuits if a company’s terms and conditions contain data protection violations. Mr. Maas wants to have draft legislation “closing this loophole” ready by the end of April 2014.

The Spiegel.de article continued,

Maas and Germany’s data protection officer Andrea Voßhoff [(C.D.U.)] furthermore admonished companies to treat their customers’ privacy with more respect. Customers’ trust is, in the end, the fundamental basis of all business models in the internet, they said. Instead of pages and pages of terms and conditions, what [customers] need is true freedom of choice when it comes to what’s allowed to happen to their own data, said Maas. “If some providers want to stubbornly persist in the digital Flegeljahren [boor, churl, cub, lout years, meaning teenagers], if they disesteem/disregard/disdain/ignore/flout/violate their customers, and if they refuse transparency, then the state will have to intervene regulatorily to protect users.”

(Fair BOND sklah geh rechh t   dare   fair BROW chh ah SHƏTS oregon ee zot see OWN en.)

Doch drohnenfähige Handydaten!

Cell phone data are droneable after all!

Last summer Germany’s foreign intelligence service, the Bundesnachrichtendienst or BND, admitted they’d been sharing phone data with U.S. intelligence agencies for years but said it was okay because cell phone data couldn’t be used to locate people and something about the N.S.A. promised not to use German-supplied phone data to kill anyone. Regarding the first claim, whistleblowers from U.S. drone programs have now explained to reporters how phone data were used for targeting assassinations around the world.

One whistleblower, describing countermeasures persons of interest have taken to keep using phones while evading geolocation and how these countermeasures can deliberately or accidentally increase the drone strikes’ already terrible civilian casualties, called the U.S. drone programs “little more than death by unreliable metadata.”

Details from the article and online discussions included:
“Pods” on U.S. drones (and presumably on urban utility poles because this might be what police have been quietly installing in U.S. cities using Dept. of Homeland Security funds) can spoof cell phones into providing data and can vacuum information off wifi networks from altitudes of four miles. Telecommunications standards in some “countries of interest” make it possible for many users there to share data the U.S. uses to identify targets’ cell phones. Wireless “party lines” quietly shared by pools of low-income civilians increase the chances that countries indulging in drone assassinations will accidentally kill party line participants and their families and neighbors, or be tricked into killing their enemies’ enemies, such as by firing missiles at wedding parties or legislatures after someone hides a cheap phone there.

(Daw chh   drone nen fey igga   HEN dee dotten.)

Höhere Gewalt

Higher violence or higher power, but it means force majeure, an event or effect that can be neither anticipated nor controlled. This has been defined more narrowly recently to limit E.U. railways’ and airlines’ ability to refuse to compensate passengers by claiming helplessness after poor management.

Even in force majeure cases such as bad weather, landslides or labor strikes, the European Court of Justice in Luxembourg said on 26 Sep 2013, passenger railways will still owe customers some money back after a late train arrival.

If your E.U. train is 1 hour late, you have the right to reimbursement of 25% of the purchase price of your ticket. 2 hours, 50%.

As part of their reporting on the Court’s decision, ARD tagesschau.de interviewed rail passengers waiting at German train stations, many of whom said they had in the past qualified for money back due to late trains but didn’t bother going through with the paperwork.

On 05 Feb 2014, the E.U. Parliament voted to strengthen air passenger rights, in part by passing a stricter, eight-part definition of force majeure for airlines.

Though they’re not done wending their way through the governments yet, the new rules would give passengers on E.U. flights delayed >3 hours the right to 300 euros from their airline, >5 hours = 400 euros, and >7 hours = 600 euros.

(HƏ ƏH rah   geh VAULT.)

Deutscher Verkehrsgerichtstag

“German Traffic Court Day,” a misleading calque. This is apparently a fruitful annual meeting of traffic experts, from government and academia, organized by an e.V. association.

This year’s topics included “Data Protection in Cars.” The president of the host association called for regulation of information protection in automobiles, saying modern cars contain up to 80 devices that record data, such as navigation systems and even airbags. He said at the moment it’s not clear whether these collected data belong to the car manufacturers or the drivers.

Cars with airbags, for example, collect information about how fast we’re driving and whether we’re alone. Onboard sensors record whether passengers are wearing a seatbelt. Courts are already hiring I.T. experts to read cars and car toys to determine whether drivers are telling the truth in hit-and-run cases. In leased electric vehicles, companies can remotely shut down the battery if payments are in arrears. A luxury S.U.V. in Cologne managed to trap an alleged car thief inside until police arrived, even though he tried to kick out doors and windows. Customers already using products that reroute them around Germany’s ubiquitous traffic jams by constantly pinging their cars’ locations can have their data unethically used for marketing and other purposes if no legislation controlling this is crafted.

In 2015 all new cars in Germany are scheduled to be equipped with “eCall,” a 911-type emergency services function that will automatically call for help after the car is in an accident but that can also be used to locate any one of these cars at any time. An E.U. press release about eCall said the system doesn’t transmit data about its users because it is usually “sleeping.”

(Doytcha   fair CARES g’RICHHTS tochh.)

Wer wirklich wissen wolle, welche Wagen am bestgewertet seien…

“Anyone who really wants to know what vehicles are the most highly rated ones…” should not consult Germany’s Munich-based A.D.A.C. automobile club’s car rankings, because “someone who has lied before, you don’t believe any more” as Spiegel.de put it.

A giant in German consumer protection has fallen. The Süddeutsche Zeitung saw documents indicating Germany’s equivalent of the A.A.A. car club had manipulated the numbers of readers’ votes received for its “Yellow Angel prize.” Auto industry pundits are now questioning all the group’s data: blue book car values, European tunnel safety evaluations, accident statistics. “If you want to know the most popular cars on German roads, we can only recommend now that you consult the government’s reliable statistics on new registrations,” Spiegel said a competitor car club, the Stuttgart-based Auto Club Europa (A.C.E.), announced in a written statement.

The hundred-year-old advocacy group, at ~19 million members one of Germany’s largest associations and Europe’s biggest car club, was a mixed-purpose, highly entrepreneurial group that did lobbying work, tested products and services, published a magazine and promoted its magazine, but also did business as an insurer, travel agent, car rental agency, long-distance bus company and of course provided much-appreciated roadside emergency aid to members with car trouble via a large fleet of highly recognizable yellow autos. They also own some small planes and 51 helicopters, apparently, supposedly for airlifting patients to hospitals but not always. Although it certainly has defended drivers well on some issues in its lobbying work, including supporting the environmentally-friendly side of some pollution questions, its interactions with Germany’s auto manufacturers have at times been problematically “symbiotic,” a Süddeutsche.de op-ed commented. The survey for which readers’ interest was faked was apparently part of the group’s self-promotion work: the A.D.A.C. awarded its “Yellow Angel” prize as usual in a lavish evening ceremony at a royal residence in Munich on Thursday, 16 Jan 2014, calling the Süddeutsche’s publication two days before about the possible manipulations “a scandal for journalism,” only to admit to the accusations two days afterward. The magazine’s editor fell on his sword.

The A.D.A.C. had recently disagreed with the statistics cited by Germany’s new transportation minister Alexander Dobrindt (C.S.U.) and his colleagues in support of the C.S.U.’s biggest goal from the recent election: to impose a car toll on non-German drivers entering Bavaria. Now the A.D.A.C.’s statistics are no longer considered reliable.

Update on 24 Jan 2014: Critics are calling for restructuring of the sprawling “anachronistic” A.D.A.C., saying a car club that takes in 2 billion euros annually can no longer be run like a pigeon fanciers’ association.

Update on 17 Feb 2014: Auditor Deloitte only had access to data going back to 2009, but there appeared to be some general trends in how A.D.A.C. manipulated the automobile brands that were made the official winners of the “readers’ choice” Yellow Angel award. No car manufacturer had two models among the top three winners, even though that did happen several times. Preference appears to have been given to new models. When they announced the auditor’s findings, both A.D.A.C. and Deloitte were still sticking with their theory that the results were manipulated by lone gunmen acting alone, said Süddeutsche.de.

Update on 25 Feb 2014: A.D.A.C.’s business manager has now resigned, after the club’s president resigned, after the communications director-and-magazine editor fell on his sword. >200,000 members have cancelled their memberships.

Update on 09 Mar 2014: Income tax is collected by the states in Germany so I presumed it was the Bavarian tax authority that examined the A.D.A.C.’s tax returns from 2007 to 2009 and decided the club owed 500 million euros in back taxes. The club did not pay an insurance tax even though it “provided grounds for an insurance relationship relevant to insurance tax law” [“ein versicherungssteuerrechtlich relevantes Versicherungsverhältnis begründet“]. But apparently this announcement was made by the federal finance ministry [Bundesfinanzministerium]. The ministry said there would be no criminal trial if the A.D.A.C. paid the half billion. The Registration Court at the Munich Local Court [Registergericht beim Amtsgericht München] is examining whether A.D.A.C. still fulfills the requirements for Verein status, in view of its business activities.

Meanwhile, Spiegel.de described a Wirtschaftswoche article reporting that federal highways money that was allocated but not spent in time in other states got sent to Bavaria, to the tune of an extra 140 million euros in 2013. Four other relatively wealthy states also received extra highways funding in 2013 that poorer states such as Berlin had to give back after not managing to spend it building highways: Lower Saxony (+80 million euros), Hesse (+47 million euros), Rhineland-Palatinate (+40 million euros), Saxony (+38 million). Bavaria’s total federal highways funding in 2013 was 1240 million euros (including the extra 140 million).

Update on 04 May 2014: Spiegel.de has received information that the A.D.A.C. auto club owned about 3.5 billion euros in 2012 in stock, bank accounts and real estate. With its dozens of subsidiaries, the A.D.A.C. auto club had a 2012 gross of nearly 1 billion euros, with about 85 million euros profit. Their next project is to open a car repair franchise, with 150 workshops.

Structurally, a Beirat has been added to the association’s management, whose members include someone from Transparency International and a former judge from Germany’s Constitutional Court. Apparently the A.D.A.C. did not and does not have a supervisory board, despite the enormous wealth and power controlled by the club. After the recent manipulation scandal became public, they added the new Beirat or additional advisory board in lieu of a more powerful supervisory board.

Spiegel wrote that the new Beirat, “at their first meeting before Easter, did not have the impression that the club was starting a transparency offensive. Rather, the top management at A.D.A.C. seemed motivated by the question of what actions would have to be taken for the club to retain its legal form of an e.V. registered association. The Munich Registration Court has been reviewing this privilege, which gives the A.D.A.C. certain advantages, for weeks now.”

(Vay ah   VEE ah click   VISS en   VULL ah,   VELL chh ah   VOGG en   om   best gah VAY ah tett   zye en)

Einheitliches Handy-Ladekabel

“Common recharger.”

After compromising five years ago by having manufacturers voluntarily provide an extra U.S.B. phone recharger port in addition to their mutually incompatible plugs, the E.U. parliament has now reached a “provisional deal” for a mandatory common device that can recharge all mobile phones (and all tablet devices) sold in Europe, effective in three years. This requirement will be added to the radio equipment rules package that hasn’t been entirely negotiated yet. Before the three-year countdown can be started (estimated possibly March 2014) it must still be approved by the Member States’ governments and the European parliament’s plenum, and get past some officials from the Industry Committee [Industriekommission] thought to be against mandating universal chargers though their boss, Antonio Tajani, is for it. Officials from the Industry Committee would also be responsible for deciding which device would become the universal charger, said Süddeutsche.de.

(Eye n HEIGHT lichh ess   HEN dee   lodd ah cobb ell.)

Internet-Ausschuss im Bundestag

Happy holidays! The Bundestag announced plans to create its own standing internet committee [ständiger Internet-Ausschuss], responsible for online issues. Though not entirely neglected, the interface between citizens and computers is not fully covered in Germany either. The Greens traditionally disliked technology, the Pirate party was trying to fix that lacuna but now seems possibly unterwandert by the German military (what was a Defense Department employee doing as party chair, one asks oneself now, post-Snowden). The new coalition has divided up online issues among a Wirrwarr of multiple ministers, some of whom oppose digital consumer protections such as network neutrality or individuals’ data privacy yet are now the designated advocates for them.

The press learned about the new Bundestag committee’s creation from Twitter.

Topics to be handled by the parliamentary committee include the expansion of broadband infrastructure, copyrights, data security.

Update on 13 Feb 2014: The Bundestag created its internet committee! It’s called Digital Agenda (dee ghee TALL   awg EN dah).

(INN tah net   OW! ss shoes   imm   BOON dess tochh.)

Bankenberatung bemängeln

German consumer protection groups “criticized the deficiencies in investment advice banks give to consumers,” saying the old issue persists that bank advisors’ recommendations depend more on the commission the advisor will earn from the investment than the return the customer will reap, the risk they will be exposed to, whether they can afford the product, and/or possibly also the harm propagated by the company invested in.

ZDF heute journal’s financial correspondent Valerie Haller said consumer protection groups such as the Verbraucherzentrale Baden-Württemberg warned that better and qualified bank advising would only happen if investment advisory services and investment sales were separated within the banks. Bank investment advisors ought to have specialist qualification (usually this means courses and a test) and the quality of their advice ought to be monitored by government with sanctions applicable after violations. These systemic changes need to be made via new legislation from the Bundestag, a consumer protection rep said.

Ms. Haller added that the banks countered by claiming ~90% of their customers said they were satisfied with the investments they’d been advised to make, to which the consumer protection groups responded that they had evidence many customers didn’t understand what they’d bought.

Apparently bank advisor’s commissions have been banned by law in the U.K., though either this was done recently or it was incomplete because a new fine was just imposed on Lloyds Banking Group for two billion pounds’ worth of bonus-fueled overselling from 2010 to 2012. The listed “products” oversold to the possibly up to 700,000 customers do not include stocks and bonds, and the Guardian quoted the U.K.’s Financial Conduct Authority’s director of enforcement and financial crime as saying customers will not be “‘put first'” while companies still “‘incentivise their staff to do the opposite.'” The Guardian said she mentioned that “the fine had been increased by 10% because Lloyds failed to heed repeated warnings about sales practices and because it had been fined 10 years ago for poor sales incentives.”

The Baden-Württemberg consumer protection group’s webpage reminds readers that Germany’s statute of limitations period for suing banks after incorrect investment advice was recently lengthened from three to ten years. Also that bank investment advisors have been required by law since 2010 to keep a record describing what was said in their meetings with clients and potential clients when discussing potential purchases of stocks or bonds [Wertpapiere]; this does not apply for consultations about other products, such as the ones Lloyds was just fined for overselling. After a consultation, German bank advisors must sign a copy of the protocol and give it to the consultee, who does not have to sign it even though some banks have claimed the opposite. The German law mostly lets the banks decide how the protocol will look but does define the following general requirements:

1. Reason for the consultation

2. Length of consultation

3. Advice-relevant information about the customer’s personal situation

4. Data about the financial instruments and investment services discussed

5. The customer’s wishes and investment goals, and their relevant weightings

6. Advisor’s product recommendations and reasons why

(BONK en bear AH toong   bem ENG elln.)

Kali-Kartell

“Potassium cartel.”

Update on 05 Aug 2013: Supposedly ~70% of the world potassium trade has been controlled by two export alliances, BPC in Russia and Canpotex in North America. The world price for potassium was kept at a “comfortable” ~$400/ton. Last summer a Russian potassium company, Uralkali, made a surprise exit from the BPC export alliance (BPC stands for Belarus Potash Company), and the potassium price then fell to ~$300/ton. The stock price of e.g. the K+S potassium and salts company in northern Hesse fell precipitously as well.

Update on 24 Oct 2013: Spiegel.de posted an amazing potassium follow-up: “A kingdom for a cartel. Lukaschenko’s battle with the oligarch.” After the Russian firm Uralkali abruptly ended their BPC cooperation with the Belarussian firm Belaruskali last summer, Belarussian Prime Minister Lukaschenko had Uralkali’s C.E.O., Wladislaw Baumgertner, arrested in Minsk, where he is still held by authorities though he was moved to house arrest in late September.

Since the split it’s been shown how dependent the White Russian state company was on its Russian partners: exports to India and China were considerable but have nearly ended because, White Russian sources said, Belaruskali’s sales personnel don’t have the English to keep their Indian and Chinese deliveries on Russian trains running? In addition to its dependence on Russian trains, White Russia remains dependent on Russian oil and gas. White Russian potassium mines have been experiencing temporary closures since the cartel ended. As the company’s revenues fall so do the state’s; Mr. Lukaschenko had been using the potassium company’s money to fill the government’s budget gaps.

Spiegel.de wrote that Uralkali and Belaruskali started working together in 2005 to help keep international potassium prices high, together controlling ~40% of the world market in 2012 for potassium salts, which are used to make artificial fertilizers. World potassium prices had peaks of as much as $900/ton, yet White Russia is now forced to try to attract nearby customers in Russia with prices around $140/ton, forcing the Russian competitor Uralkali to counteroffer $160/ton for domestic customers.

More historical background provided in the article: Uralkali is controlled by major shareholder Suleiman Kerimow (worth >$7 billion) who bought his interest from another oligarch in 2010. He was also interested in acquiring Belaruskali from Mr. Lukaschenko, who not only did not sell but announced that Mr. Kerimow had offered a purchase price of $10 billion to the government plus an additional $5-billion bribe to Mr. Lukaschenko. When the purchase offer was made is unclear from the Spiegel.de article but the nature of the gossip flying indicates it was before the BPC alliance ended.

(CAWL ee   cawt ELL.)

Null Null Sieben

The 007 license plate of the car that dropped off Chancellor Merkel at the E.U. summit on 24 Oct 2013 in Brussels, where the hot unofficial topic was outrage at revelations about U.S. spying on the German chancellor’s cell phone and in previously-unknown but huge volumes in France. Possibly also Italy, including the Vatican. And now Spain.

“Spying on your friends is not okay.” —Angela Merkel (C.D.U.)

“That would represent an entirely new quality, and cast a new light on all statements made by the N.S.A. in the past few months.” —Ronald Pofalla (C.D.U.), who as Kanzleramtschef, the chancellor’s chief of staff, is responsible for coordinating and monitoring Germany’s intelligence agencies. He had declared the scandal over last summer in response to assurances from the U.S.A.

“We will not allow ourselves to be treated like that by the Americans. The trust has been harmed. I think a few things have to happen now before this trust can be restored.” —Hans-Peter Friedrich (C.S.U.), interior minister

“The Americans are not fully aware of the situation. And then you’re told things like, ‘but everyone spies on everybody.’ And that’s where you have to say loudly and clearly: that is not okay. Friends are not allowed to eavesdrop on friends. And how would people react in America—this is what we’re saying on our visit here, how we’re describing it—if the Bundesnachrichtendienst were to spy on the U.S. president.” —Elmar Brok (C.D.U.), chair of the European Parliament committee for Foreign Affairs, currently visiting Washington D.C. to complain

“The chancellor’s cell phone is important, but the private and business communications of normal burghers is just as important. We will stand up for the protection of the basic rights of German citizens[…]” —Thomas Oppermann (S.P.D.), chair of the Bundestag’s Parlamentarisches Kontrollgremium intelligence committee that is tasked with but not always successful at monitoring and controlling Germany’s intelligence agencies. Mr. Oppermann may be hoping to become the new Justice Minister, replacing Sabine Leutheusser-Schnarrenberger (F.D.P.).

“What sort of terrorists are they trying to find in the chancellor’s cell phone? This is a really absurd indication that the reasons they’ve told us so far absolutely cannot be true.” —Christian Ströbele (Green Party), member of the Parlamentarisches Kontrollgremium intelligence committee

“It’s good that the clarification of the facts appears to be starting, now, and that at least a healthy distrust vis-à-vis the American intelligence services also appears to be arising, now.”  —Steffen Bockhahn (Leftists), member of the Parlamentarisches Kontrollgremium

“The German government now mistrusts all claims and assurances made by the U.S. government in the entire N.S.A. affair. Now that we know they bugged the chancellor’s cell phone, the U.S. government can no longer sustain its claim from last summer that it did not injure Germany’s interests. It did, and representatives of all parties agree on this, utterly deceive Germany.” —Ulrich Deppendorf, ARD studio head and news editor-in-chief

“I think we should be honest that we have the capacity to obtain information that we didn’t have before. What we need now is the appropriate legislation that ensures we are not seeking or not using the capacity that we have.” —Fredrik Reinfeldt (centrist Moderate Party), Prime Minister of Sweden. (Approximate quote; his original English was drowned out by the German translation.)

“So we have to think about what we need. What data protection agreements do we need, what transparency do we need. We stand between the United States of America and Europe, before shared challenges […]” —Angela Merkel (C.D.U.)

“When I walk into a negotiation and must fear that the other side, a friendly democracy, already knows from espionage what I want to say in that negotiation, that’s no longer eye-to-eye.” —Martin Schulz (S.P.D.), president of the European Parliament

007, might be funny if the matter weren’t so serious. […] But this isn’t just about the chancellor’s cell phone. The much bigger concern is industrial espionage, which could cost European companies billions.” –ARD correspondent Rolf-Dieter Krause

In a wonderful interview given in German on the evening of Oct. 24, E.U. commissioner Viviane Reding said she’d heard that England’s government did not want European data protection but Poland, Italy and France had joined together to fight for it. Also: “Both of us, both the Americans and the Europeans, need this Transatlantic Trade Agreement. But to be able to negotiate an agreement, you need trust. I think this trust is no longer quite as present. That’s why the first thing that must be done is to restore that trust. And then, so that Europe can speak with a single voice, for that you need strong data protection that is Europe-wide. And that has to be the basis from which we can then move into negotiations with the Americans.”

“The whole time, Frau Merkel acted as if the affair was unimportant, as if it wouldn’t impact anyone in a big way. But then when it affects her, she gets upset? When all German burghers were affected, when it was about protecting burghers’ basic rights, she didn’t do anything then.” —Anton Hofreiter (new Green party co-chair)

“It is strange: umpteen million communications from Germans alone are recorded every month by British and U.S. intelligence agencies. With these extraordinary claims from the documents supplied by the ex-N.S.A. man Edward Snowden the snooping story exploded into public view last summer, but left the German government, and one must say most Germans as well, rather strangely unmoved. Then last night a single cell phone was added to the mix—OK, it was the chancellor’s—and suddenly all hell broke loose.” —Claus Kleber, moderator at ZDF heute journal

The new Bundestag scheduled an extraordinary meeting or special session [Sondersitzung] to discuss the N.S.A. spying affair in mid-November. All political parties also agree a parliamentary inquiry [Untersuchungsausschuss] is “unavoidable.” Many parties would like to invite Edward Snowden to testify before the committee, after which he can apply for asylum in Germany.

Update on 28 Oct 2013: On Thursday, Brazil and Germany will introduce a draft United Nations resolution against N.S.A. spying. FAZ.net reported that a large majority was predicted to approve it, and that though United Nations General Assembly resolutions tend to be nonbinding, unlike Security Council resolutions, the fact that Brazil and Germany are behind this and that so many of the 193 member states support it give it extra significance. Brazilian reporter Sonia Bridi from TV Globo said Brazilian President Dilma Rousseff’s government wants the world to make international regulations for internet access and international telecommunications such that no individual state can ever again have access to the world’s key communications hubs or nodes.

Update on 26 Nov 2013: The United Nations Human Rights Committee approved Germany and Brazil’s U.N. resolution against data spying. It will be sent on to the U.N. General Assembly, where the nonbinding resolution is considered certain to pass in December 2013.

“Today, for the first time, a resolution in the United Nations expressly specified that human rights have to be protected online just as much as they must be protected offline.” –Peter Wittig, permanent representative to the U.N. for Germany since 2009

(Newel   newel   ZEEB en.)

Anti-F.I.S.A.-Klausel

Anti-Foreign Intelligence Surveillance Act clause.

E.U. justice commissioner Viviane Reding has had trouble passing her data protection reform. Years of debates, thousands of amendment proposals, successful lobbying by U.S. companies and successful pressure from U.S. governments. But now everyone’s mad.

On 21 Oct 2013 the European Parliament passed data protection reforms. They updated 18-year-old rules that were obsolete and also loose enough to let the lawscape vary from country to country, enabling internet companies such as Facebook to shop for Member States with laxer data protection laws such as Ireland.

The so-called “anti-F.I.S.A. clause,” which regulates sharing of E.U. burgher data with so-called third-party countries, had actually been politely deleted in response to pressure from the U.S. government and lobbying from large U.S. companies, according to a June 2013 Spiegel.de article. Because everyone’s mad, the responsible “Libe” civil liberties committee put the anti-F.I.S.A. clause back into the proposed reform and it has now been passed by the European Parliament.

Spiegel.de summarized the key points:

  • Sanctions for violating European data protection rules have been “drastically” raised, to up to 5% of a company’s annual worldwide gross. Earlier this year Frau Reding had had to accept a compromise of a 2% maximum fine, but no more!
  • “Privacy by design,” which means, Spiegel.de wrote, “Companies must design their [websites] to be as [data-frugal] as possible, with the most data-protection-friendly default settings. They must also give their users the option of using their services anonymously and pseudonymously.”
  • “Explicit consent” by users to processing and sharing of their data. The explicit consent cannot be given in small print such as an end-user license agreement. Standardized easily recognized symbols must be included in the request for consent. Companies will not be allowed to create a user profile of users who forbid them to create one.
  • More guardians. Companies dealing with data from more than 5000 people will have to hire a data protection officer.
  • A European Union data protection council will be created to watch over these rights and abuses. To submit a complaint, burghers will only have to contact their country’s data protection office and will be able to submit complaints in their own language. The national data protection offices will escalate and forward.
  • The Libe committee was unable to get a majority vote in favor of the “right to be forgotten” this time, settling instead on a “deletion right” under which E.U. burghers will be able to force companies to tell them what data they have collected on them and then to delete it. The companies will not be responsible for ensuring that data do not appear anywhere else in the internet however, which is what a “right to be forgotten” would have meant. Spiegel.de said German data protection law is stronger here.

It’s not over yet. The European Parliament must now agree on a final version of the reform with all 28 countries in the E.U. Council and in the E.U. Commission. If the reform is not done and dusted before European Parliament elections in April 2014, it may be delayed for ridiculous lengths of time again.

(Auntie   FIE zah   cl OW! zell.)

“Das Geld dafür geben die Anderen”

“Other people are paying for it,” how financial reporter Frank Bethmann commented the U.S. company Verizon’s “schwindelerregend” offer of $130 billion to buy out British partner Vodafone’s stake in their U.S. joint venture Verizon Wireless. In the 02 Sep 2013 announcement of the sale, Verizon said as part of it they intended to borrow $25 billion one week later at the currently very low interest rates; that would have been the largest amount ever borrowed by a company in the history of the world apparently.

Update on 12 Sep 2013: Verizon’s $49 billion Unternehmensanleihe [“company loan” i.e. corporate bond] “emission in eight tranches at varying interest rates and terms to investors around the globe” was the biggest ever, according to manager-magazin.de, adding that the takeover itself was also the third-biggest ever.

This is not the only vertiginous telecom merger in the works. There’s two in the German market as well.

On 23 Jul 2013, Spanish Telefónica’s German subsidiary O2 announced that it wanted to buy the Dutch KPN’s German subsidiary E-Plus, though “only” for five billion euros. The resulting company would become the German market’s largest mobile phone provider (43 million customers), followed by Deutsche Telekom subsidiary T-mobile (37 million customers) and then the British Vodafone (32 million c.). The merger required approval from German and E.U. competition authorities.

Update on 12 May 2014: The German Monopoly Commission [Monopolkommission] told the Frankfurter Allgemeine Zeitung they expect the E.U. to set serious competition-saving conditions for approving Telefónica’s acquisition of E-plus, including that there will still be four mobile telephony providers in the German market after the merger. “Abstract concessions and offers won’t do it.” Three mobile phone providers competing in the German market would not suffice because E-plus was the one that stirred up the market the most and it would be the one disappearing.

Update on 13 Sep 2013: Now British Vodafone is purchasing the Munich-based Kabel Deutschland, “Germany’s biggest cable network operator,” at ~8.5 million television households,” for ~11 billion euros (~7.7 billion for ≥75% of Kabel Deutschland’s stock and the rest to cover Kabel’s debts; stock cost to be announced Monday 16 Sep 2013), according to Spiegel.de and manager-magazin.de. This will increase Vodafone’s competitiveness with Deutsche Telekom in the German market selling wireless and landline telephonery, television cable and internet access. European competition authorities approved the deal on 20 Sep 2013.

Huge telecom mergers & acquisitions could be motivated by more than just the roseate future of voice and internet communications plus current rock-bottom interest rates. If telecom industry people believe governments will stop defending net neutrality and consumer privacy, they will fear they must join a large existing telecom and fight to expand it, or die. They will not think risky entrepreneurship or small-to-medium-sized companies are an option. If a telecom gets big enough in a deregulated market that includes suspicionless surveillance, the money will sort itself out somehow. In regulatory situations where governments have to grant unusual concessions to big telecoms, governments will grant unusual concessions to big telecoms.

(Doss   GELD   dah foor   gay ben   dee   ON dare en.)

Ohne uns nichts

“Without us, nothing.” Since the George W. Bush administration, the former U.S. phone monopoly AT&T appears to have provided cooperation in constitutionally questionable surveillance projects to such a degree that one might conclude the company thinks no one can be elected president of the U.S.A. without its support.

In addition to the famous access to a key internet node that AT&T was caught providing in San Francisco in 2002 and then granted retroactive immunity for by Congress, NYTimes.com reporting and others’ follow-ups appear to indicate AT&T has been keeping its own copies of phone communications which people have used to access e.g. a 26-year-old phone call. AT&T let government agents hire and even “embed” AT&T employees to help search the phone company’s difficult-to-use database providing access to these calls. NYTimes.com described the expensive database consultants as having to sit next to the government agents as they attempted to use the software; if this is so it makes you wonder how and if AT&T managed to keep the N.S.A. and G.C.H.Q. from having remote access to its computers.

AT&T also appears to be gradually re-acquiring the Baby Bell phone companies it was split into. Were that the case, the company might leave ~1.5 competitors in the market to avoid appearing monopolistic.

(OH neh   OONTS   NIX.)

“Völlig achtlos kann sich der Verbraucher nicht verhalten.”

“Consumers cannot behave entirely heedlessly,” said a representative of Germany’s federal-level consumer protection agency, reminding Vodafone customers to keep an eye on their bank accounts for any strange activity.

The data of two million German Vodafone customers, including direct-debit banking data, have been stolen. Düsseldorf prosecutors are investigating. Vodafone discovered the theft on 05 Sep 2013 and announced it to the public a week later. They said they thought it was an employee at an external service provider.

The company set up a F.A.Q. website for the issue here.

Spiegel.de reminds us that last year Vodafone learned in December 2012 that its hardware had made its customers’ private data vulnerable, but the company only informed its customers after the Bundesamt für Sicherheit in der Informationstechnik [Federal Office for Safety in Information Technology, BSI] in Hamburg publicly announced a safety warning in August 2013.

(FULL ichh   OCHH t loh ss   con   zichh   dare   fair BROW chh ah   nichh t   fair HALT en.)

 

“Für viel Geld, die Filet-Stücke des Internets erhalten”

“For a lot of money, receiving in return the prime cuts of the internet,” said European Parliament member Jan Philipp Albrecht (Green party).

E.U. commissioner Neelie Kroes announced a proposal that she said would guarantee net neutrality in the European Union while allowing companies to purchase advantages in the tubes. Critics said her doublespeaked plan is the opposite of net neutrality and would create the dreaded “two-class internet,” although as Spiegel.de pointed out it would fragment internet access into many more than two classes. Dozens if not hundreds of access classes would spawn, with opaqueness for consumers and many new sources of income for middlemen. Ms. Kroes introduced her plan on Thursday, 12 Sep 2013, saying she hoped to implement it rapidly. She praised her plan as the first time net neutrality would be protected throughout the entire European Union.

The proposal must be approved by the E.U. Council and the E.U. Parliament. There will be an E.U. parliamentary election in April 2014.

(Foor   FEEL   GELD   dee   fee LAY SHTOOK eh   dess   IN ta nets   err HALT en.)

Die Verharmloser

“The harmlessers.” Pejorative hurled in June 2013 at ruling-coalition German politicians who said the U.S.A.’s spying on domestic and international emails, phone calls, video chats, text chats and search histories, in addition to snail mail, in-house company computer networks, the ubiquitous traffic and security cameras in public spaces, and even medical, financial and toll records, is okay with them. Even if this data was used to track and kill people via extralegal drone assassination.

German media have also said the ruling coalition is “talking the N.S.A. problem small,” “veiling” and “down-moderating” it, using “placating” and “appeasing” language to angry voters, especially but not exclusively before the Bundestag election on 22 Sep 2013. Data protection officers remain unappeased, vociferously warning about these issues at their national meetings. Bundespräsident Joachim Gauck invited federal data protection officer Peter Schaar to discuss the problem and its implications at the presidential palace of Bellevue on 06 Sep 2013.

Spiegel.de reminds us the imbroglio includes tapping international fiber optic cables, forcing companies to give up their customers’ data, commissioning back doors in software and hardware advertised as secure and the N.S.A. and G.C.H.Q.’s ability to use brute computing force to break encryption. Presumably satellite communications aren’t immune either.

U.S. government intelligence agencies are also spreading this behavior around the world like an antidemocratic virus to friends, neutrals and foes alike as they share technology and illicitly-gathered information with allied intelligence agencies, pay telecoms and cable companies to codevelop snoop technology and render services and outsource much of their own sensitive work to private-sector companies. Non-allied countries will feel forced to invest in similar strategies as well. Companies are being perfectly reasonable if they decide to sell to everybody. Ignoring even light regulation sets a poor example and paves the way for disaster under bad leadership, anywhere in the world.

(Dee   feh HOM loze ah.)

Intransparente Preisgestaltung

“Intransparent pricing.”

The German supreme court in Karlsruhe [Bundesgerichtshof, BGH] found for the plaintiff in a case brought by the North Rhine-Westphalian consumer protection agency on behalf of natural gas customers against “intransparent price increase clauses in special contracts” of the utilities company R.W.E. Apparently “special contracts” [Sonderverträge, Sonderkundenverträge] in this case are contracts for customers who switched to their current utility from a prior utility. The court found insufficient reasons were cited for price increases on these customers’ utility bills. A ratepayer interviewed on tagesschau.de said when he asked about it R.W.E. fobbed him off by telling him their rates were raised for “responsible, suitable and well-grounded reasons” (“wir haben verantwortungsbewusst, angemessen und begründet kalkuliert”), still without citing them.

The BGH decision was based on a European Court of Justice ruling that the criteria for rate increases have to be notified to these customers when they sign their contract. It is not enough to merely notify European utility customers in advance of rate increases and give them a right to cancel their contract.

Clauses in “special gas contracts” must contain information about causes for, prerequisites for and scope of possible price increases, in a clear and understandable manner, the BGH judges said.

The German court’s decision applies retroactively for the past three years. Millions of German billpayers are now being encouraged to check their natural gas contracts’ price increase clauses for legality and apply for their money back if they don’t meet requirements. A press release about the decision from the North Rhine-Westphalian consumer protection agency said >70% of Germany’s 13.5 million gas customers are on these special contracts because they’ve switched utilities—encouraging market forces to rationalize prices for consumers!—and recommended the energy utilities provide “slender and consumer-friendly procedures” for the affected customers to ask for and receive their money back.

(Inn tronz par ENT eh   PRIZE geh SHTOLT oong.)

Erdgaspreis

Price of natural gas. A March 2013 article in Rupert Murdoch’s Wall Street Journal mentioned that the Commodity Futures Trading Commission said the Libor benchmarks manipulation scandal came to their attention after “firms and traders” were sanctioned for reporting false data to energy index compilers in attempts to manipulate natural gas prices between 2003 and 2005.

(ED gauze prize.)

Ölpreis

In 2011 a Goldman Sachs study apparently stated that market speculation had indeed helped drive up the price of oil for consumers. In 2012 U.S. Commodity Futures Trading Commissioner Bart Chilton said, “Using the Goldman Sachs research figure, and multiplying 10 cents times 233.9 million, would mean that theoretically there’s a ‘speculative premium’ of as much as $23.39 a barrel in the price of NYMEX crude oil.” Mr. Chilton has also said that the commodities business is a possible loophole for banks in the U.S.’s new frequently-postponed “Volcker rule” intended to reseparate banking from investment gambling.

Potential oil bottleneck points persist in privately held and/or operated oil infrastructure. Oil traders now own oil refineries. Pipelines are included in the infrastructure large banks have somehow acquired part ownership of. U.S. bank Morgan Stanley invested in the “global oil tanker operator” Heidmar in addition to “fuel chain supply manager” TransMontaigne. An F.A.Z. article described how the world’s three largest oil trading firms, Switzerland-based Gunvor, Vitol and Glencore—”prescient” commodity markets pioneer Marc Rich’s old firm—work today, supposedly on the basis of fast-computer-based price arbitrage rather than speculation. Moving into production, Glencore is now invested in oil wells, coal mines and metals mines, after its late-2012 fusion with Swiss competitor Xstrata.

Apparently a landmark 2003 U.S. Federal Reserve decision allowed U.S. investment banks to start “trading oil cargoes.” In July 2013 the Fed announced it was “reviewing” that decision. Though Fed deregulation may have unleashed the Wall Street side of recent international commodities speculation problems, the Fed probably cannot fix it now without simultaneous coordinated reforms from other regulators around the world.

(ILL prize.)

Spotmarkt

Spot market, where financial instruments or commodities are sold for immediate delivery, unlike the futures market where they are sold for delivery at a later date. Wikipedia said a spot market can be an organized market, an exchange or over-the-counter (O.T.C.).

Regarding the spot market price of aluminum: Goldman Sachs was accused of bottlenecking aluminum at Goldman’s Metro International aluminum warehouses outside Detroit, increasing customers’ delivery wait times since purchasing M.I. in 2010 from six weeks to sixteen months by first lowering prices to attract a stockpile (“50,000 tons in 2008” to “~1.5 million currently”) and then, actually, trucking a minimum daily regulatory-defined shipment amount of 3000 tons back and forth among the 27 warehouses. There were also accusations of understaffing, reduced shifts and prioritizing putting aluminum into storage over taking it out. The shuttle-shuffled delays raised a premium added to the price of all aluminum, driving up the spot market price “according to an arcane formula” even for metals bought directly from mines or refineries to bypass these warehouses. While delaying delivery the warehouses also continued charging rent on the stored metal. Perfectly legal according to current international regulations, apparently set by the London Metal Exchange.

The London Metal Exchange might need more disentanglement from the entities it is supposed to regulate. According to the NYTimes.com article, it still receives 1% of the rents collected by the ~700 warehouses it regulates around the world. Until 2012 it was owned by its member regulees, including Goldman Sachs, JP Morgan Chase, Barclays and Citigroup. Many of its metals warehousing regulations were written by a board populated by executives from banks, trading companies and storage companies. In July 2012 the L.M.E. was sold to Hong Kong Exchanges and Clearing, part-owned by the Hong Kong government, for ~$2 billion. A NYTimes.com description of the 2012 sale said it “will allow the Asian company to control the world’s largest futures trading exchange for metals like aluminum, copper and zinc, as emerging market demand for commodities remains strong.” In 2012 Hong Kong Exchanges and Clearing was supposedly hoping to get an exemption from Chinese laws preventing foreign companies from owning these sorts of metals warehouses in China.

The U.S.’s Federal Reserve Board could, said NYTimes.com, quit extending exemptions that allow banks like Goldman Sachs to invest in nonfinancial enterprises. Though the Fed’s stated conditions in allowing banks to diversify into commodities investment were “only if there was no risk to the banking system” and if the deals “could ‘reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices,'” yet many people would say its deregulation achieves the opposite effects, that big “diversified” banks’ risk management still appears to endanger U.S. and world economies and now banks’ having bought up important infrastructure might be presenting them with irresistable temptations such as artificial bottlenecking or even information advantages not all traders always refrain from using.

Update on 25 Jul 2013: The U.S. Senate’s banking committee has criticized that the Federal Reserve is not communicating well with them. However, wrote the F.A.Z., the U.S. Congress could pass its own banking reregulation rules without waiting for the Federal Reserve.

It’s unclear whether shadow trades are involved here, but it’s also unclear why everyone hasn’t gone broke if this is how they’re doing business:

“Industry analysts and company insiders say that the vast majority of the aluminum being moved around Metro’s warehouses is owned not by manufacturers or wholesalers, but by banks, hedge funds and traders. They buy caches of aluminum in financing deals. Once those deals end and their metal makes it through the queue, the owners can choose to renew them, a process known as rewarranting.”

If Goldman is indeed paying aluminum owners, fellow speculators, to rewarrant their metal and leave it in the warehouses piling up rent owed to Goldman, that might indicate some creative profits or at least useful losses are being made.

Aluminum is economically important enough that Chancellor Angela Merkel’s government has been giving aluminum refineries, notoriously high-volume electricity consumers, various electricity rebates that must be paid for by individual consumers or “ratepayers” in their home electricity bills because, Germany’s government said, the preservation of the aluminium supply was that significant for their economy as a whole.

(SHPOTT mocked.)

Außerbörslicher Schattenhandel

“Off-market shadow trading,” which der Spiegel says is also known as over-the-counter trading, done directly between speculators such as bank traders. May exceed trading in the (regulated) markets.

E.U. and U.S.A. regulators agree that they want to regulate O.T.C. trading. An F.A.Z. op-ed discussing recent U.S. Federal Energy Regulatory Commission (F.E.R.C.) fines mentioned that other U.S. financial authorities that could impose fines on international financial companies such as banks include the S.E.C. (Securities and Exchange Commission) and C.F.T.C. (Commodity Futures Trading Commission). It cited a quite-large Financial Times estimate of the size of global O.T.C. trading amounting to well over half a quadrillion dollars.

Regarding shadow-sector speculation in electricity: on 24 Jul 2013 the F.E.R.C.’s fine was upheld to London-based Barclays bank of nearly half a billion dollars to the bank (and $15 million to one manager and $1 million each to three traders) for benchmark manipulation affecting U.S. electricity markets between 2006 and 2008, including taking on-market losses in order to increase the value of off-market O.T.C. bets. Barclays intended to keep fighting the fine, however, and if the bank doesn’t pay it within the 30-day deadline the case could go to a U.S. federal court which could reset the fine. In January 2013 Deutsche Bank negotiated a settlement with the F.E.R.C. for the same electricity market gaming and received a fine of ~$1.5 million. On 24 Jul 2013 JP Morgan Chase was still negotiating with the F.E.R.C. about their fine for manipulating electricity prices in California and the Midwest; originally the settlement was said to be at nearly a billion but Chase succeeded in negotiating it down to less than one billion dollars though so far still more than Barclays’s ~$480 million.

Update on 30 Jul 2013: JP Morgan Chase’s F.E.R.C. fine for allegedly manipulating U.S. electricity markets was negotiated down to $410 million.

Regarding shadow-sector speculation in food commodities: The day before announcing its largest capital collection in its history as a mutual savings bank, on ~28 May 2013 Germany’s fourth-largest bank at the time published an open letter to the consumer advocacy organization Foodwatch.org saying their bank was joining their country’s second-largest bank and several smaller banks in pledging that they will no longer trade in or sell financial products based on agricultural commodities (such as grains). They recommended other banks also cease doing so in order to keep from driving up world food prices, remarking that investors’ demand to participate in food-based funds is low anyway. D.Z. bank said they have been and will continue to work closely with university academics to study and monitor world agricultural economics and the effects of food speculation. They requested government reregulation of both markets and of off-market trading to re-introduce “position limits” on the amount one entity, such as a hedge fund in the shadow financial sector, could wager on food-based financial products. After deregulation in the early 2000’s, “the speculators’ share in international commodity markets increased from 30% to 80%.”

At the time this D.Z. Bank letter was published, E.U. leaders intended to meet in late June 2013 to agree on regulations imposing these food-trading position limits but, said the head of the bank in question, “the financial sector” had already managed to introduce many loopholes into the drafts— “practically neutralizing the limitations on speculators,” said Foodwatch head Thilo Bode.

(Ow! ss ah BƏZZ lichh ah   SHOTTEN hond ell.)

 

Sicherer-Hafen-Abkommen

“Safe Harbor accord.”

After years of discussion, on 19 Jul 2013 E.U. ministers reached an agreement on reforming their outdated data protection principles at their Lithuania meeting, agreeing inter alia that any companies wishing to do business with one of the E.U.’s 500 million citizens will have to obey the E.U.’s privacy regulations or pay fines of “up to 2% of world income,” said justice commissioner Viviane Reding.

She called into question the E.U. and U.S.A.’s current pre-millennial “Safe Harbor” personal data transfer agreement, which companies join voluntarily and in which they verify their own compliance. About a thousand companies joined the agreement, including companies that shared customers’ personal data with the N.S.A. Commissioner Reding said the U.S.A.’s Patriot Act had annulled the Safe Harbor agreement anyway. “I have already told the parliament that if [the Safe Harbor agreement] is in fact what I think it is, namely a loophole, then we’re done with it.” She is counting on German and French support for the new data protection reforms.

Update on 27 Nov 2013: E.U. interior commissioner Cecilia Malmström (Swedish Liberal People’s Party, conservative-liberal, liberal with the non-U.S.A meaning of libertarianesque) announced the E.U. Commission was not going to change the toothless self-policing “Safe Harbor” data protection agreement for now. E.U. justice commissioner Viviane Reding (Luxemburger Christian Social People’s Party and European People’s Party, center and center-right) has given the U.S. a 13-point data protection homework assignment to implement by summer 2014, after which the Commission will re-examine torpedoing “Safe Harbor.”

(ZICHH ah ah   HAW fen   OB come en.)

Verschlüsselungspflicht für Telekom-Unternehmen

“Mandatory encryption for telecom companies,” one solution proposed by the opposition to Angela Merkel’s coalition in the wake of Edward Snowden’s surveillance revelations. Another solution, discussed by the ruling coalition, was supposedly transferring responsibility for saving searchable copies of all communications from public-sector government agencies to private-sector phone companies.

Update on 02 Sep 2013: NYTimes.com reporting and others’ follow-ups appear to indicate that the company AT&T has been keeping its own copies of phone communications, more than just “metadata,” and people have used it to access 26-year-old phone calls. AT&T employees could be hired to help government agents search their difficult database.

Update dated 4 July 2013: Holland’s Data Protection Authority issued a report on their investigation into mobile network packet inspection by KPN, Tele2, T-Mobile and Vodafone, finding that the companies illegally saved individual customers’ online data, such as websites visited and apps used. The data was furthermore saved in a “detailed” manner.

(Fer SHLÜSS ell oongs flichh t   foor   TAY lay kom oon ter NAY men.)

Online-Zwang

Mandatory internet contact established by products with their mothership company, that can’t be prevented by users.

(ON line TSVONG.)

EU-Datenschutzreform

“EU data protection reform” of the EU’s current data protection rules which were passed in 1995.

EU commissioner for justice, fundamental rights and citizenship Viviane Reding said she’s been fighting for this reform for several years now. A proposal she submitted 18 months ago has been languishing, even though the EU’s highly controversial “Vorratsdatenspeicherung-Richtlinie” [data retention directive] was negotiated in under six months, she said according to an 11 Jun 2013 Spiegel article. Laws restricting consumer rights are thus apparently passed much faster than laws guaranteeing consumer rights, in the USA and in the EU.

Reding’s EU data protection reform proposal would allow EU residents’ data to be shared outside the EU if there were appropriate legal protections in place in the recipient countries or organizations. Apparently EU citizens (and US citizens?) cannot sue in US courts in response to inappropriate sharing of their data, for example, so until that changes EU citizens’ sensitive data could not be shared with US groups. On the other hand, as Reding said in a speech at the Dublin summit on 14 Jun 2013, “In Europe, also in cases involving national security, every individual—irrespective of their nationality—can go to a Court, national or European, if they believe that their right to data protection has been infringed. Effective judicial redress is available for Europeans and non-Europeans alike. This is a basic principle of European law.”

Reding’s original proposal said there had to be a Rechtshilfeabkommen, bilateral legal assistance agreement, between the EU and the recipient country, but that bit was deleted before the Prism scandal broke in response to pressure from Washington DC. A group of European parliament members including Jan Philipp Albrecht (Green Party, Germany) and Josef Weidenholzer (Social Democrat, Austria) are now pushing to have the provision put back into the proposal. There is no mutual legal assistance agreement between the USA and the EU.

While some actors in the USA’s recently public “lawless space of the secret services Moloch around the NSA and FBI with its opaque/unmanageable network of private mercenary companies” [“rechtsfreie{r} Raum des Geheimdienstmolochs um NSA und FBI mit ihrem unüberschaubaren Netz an privaten Söldnerfirmen” (F.A.Z., 14 Jun 2013)] might consider themselves not constrained by updated EU data protection rules, Reding’s proposed economic penalties of up to 2% of their international annual gross on companies that incorrectly share EU residents’ sensitive data might have a better deterrent effect on nonshadowlands companies.

(Eh Oo   DOT en shoots ray form.)

Schlichtungsstelle für Flugreisende

“Arbitration board for air passengers.” Created on 03 May 2013 by the Bundesrat to support consumers traveling by air. Starting November 2013, passengers in Germany can contact this office to seek information about passenger rights and financial remuneration from airports and airlines after e.g. delayed connections, missed connections and/or lost luggage. What airlines owe passengers after which screwups is also being defined in regulations.

Update on 01 Nov 2013: German air passengers can now contact the Schlichtungsstelle für den öffentlichen Personenverkehr [German Conciliation Body for Public Transport] to start arbitration proceedings in disputes with airlines. German rail, bus and ship passengers already had this right from that office. Costs for the proceedings will be paid by German transport companies; passengers requiring arbitration in a transport dispute will only have to pay their own costs.

The söp’s charming and helpful English page stated,

“A traveller can get help with a complaint about delays and missed connections, train and plane cancellations, damaged or lost luggage, faulty information, tickets and reservations, and/or bad service. The main task of the söp is the out-of-court settlement of individual disputes between travellers and the transport companies. Within this, söp also helps to strengthen the customer satisfaction with the transport company. […]”

“The söp follows a service and practical approach, as intermodal (‘verkehrsträgerübergreifende’) settlement scheme. It is common for travellers to use more than one form of transport (e.g., train to plane), which can take up a lot of time in a dispute by investigating the whole chain of transport, including the responsible contracted partners. With the söp the consumer does not have to deal with the question of responsibility and can, independent from the transport of choice, just deal with one contact person at söp (one-face-to-the-customer-approach).”

(SCHLICHH toongz shtell ah   foor   FLOOG rye zen dah.)

Datendrosselung

“Data throttling.” Deutsche Telekom, whose subsidiary T-Mobile stood out from other US telephone companies because it was never explicitly mentioned in the press as having given its customers’ data to the George W. Bush administration, has announced that starting May 1, 2013, it will slow down internet traffic for its flat-rate German customers above a low monthly data limit of 75 GB. There will be no appeal. People are furious. Critics say there may be a competition issue because Telekom’s own online content, such as from its entertainment channels, will not count toward the monthly data limit. If so, this might be a case for the Bundesnetzagentur, the German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads (BNetzA).

Update on 30 Oct 2013: A Cologne court forbade Deutsche Telekom to slow down the data supplied to its flat-rate internet customers, in a lawsuit brought by the North Rhine-Westphalian Consumer Protection Agency [Verbraucherschutzzentrale Nordrhein-Westfalen e.V.]. Deutsche Telekom was planning to reduce these household internet connections to as low as <10% of normal surfing speeds.

Süddeutsche.de reported that the court said Telekom could slow down its customers’ internet access but not without changing its current marketing. Without fixing the problem, “Drosselkom” had tried several responses to the outrage sparked by these plans this year, including offering a second more expensive flat rate plan that really, they swore, this time, would not be subsequently decelerated. Competitors 1&1 and Kabel Deutschland have been capping their customers’ internet connections too, SZ reported. They quoted a pundit as saying the Cologne Landgericht’s verdict was important for starting to create limits to contracts that have been being arbitrarily changed by companies. Telekom plans to appeal.

(DOT en DROSS ell oong.)

Niederländische Zwischenhändler

“Dutch intermediary dealers.” EU findings from a total of ~7000 genetic tests on food products to investigate mislabeled horsemeat were announced on 16 Apr 2013. 0% abnormal test results in the UK, 3.3% in Germany and 13.3% in France, where purchases from Dutch intermediaries turned out to be particularly mislabeled. A French Green Party member claimed it wasn’t even proper horse meat being mislabeled, but rather slaughterhouse wastes. On se demande encore comment est-il possible qu’il y ait tant de chevaux en Europe? Where are so many horses coming from, that horse meat could prove cheaper than farmed beef and mutton on the global market? Racetracks?

Particularly customers of the shadowy Dutch figure known as Willy Selten are affected. Yet again, Dutch is funny if you know English and German but not Dutch. Willy Selten’s large meat wholesaler delivered to ~500 companies in 16 EU countries.

The EU commissioner for consumers wants to change government food testing to verify truth in labeling from a national to a European matter. He said this is another problem whose scope exceeds the capacity of individual national government offices. Crowdsourced cheap DNA test kits for species-specific markers would also help.

(NEE derr lend ish eh   TSVISH en hend lah.)

Tag des sicheren Internets

“Safer Internet Day,” 5 February. The 2013 theme was “Connect with Respect.” This is sponsored by the European Union’s Safer Internet Program.

(TOCHH   dess   ZICHH er en  INternets.)

Stromanbieter wechseln

“To switch electricity providers.” Many industries in Germany have been granted electricity rebates that are ultimately being paid by individual consumers. Some policy watchers are concerned that electricity prices are rising so rapidly in Germany because consumers are on the hook for avoidable surplus costs. Competitive “market forces” are supposed to prevent consumer abuse, yet not enough people are switching providers for the utilities to change their behavior.

On 29 Nov 2012 ZDF heute journal said they’d posted a handy 60-second video showing how to switch to a cheaper electricity provider, and they broadcast a brief clip of it showing a timer counting down from 00:60 to 00:50 while a lady researched electricity prices and contracts. Yet I have searched and searched for this video and can’t find it. ZDF did have a similar video from 22 Nov 2012 online; this one is 2:10 long and only points out pitfalls to look for in the new contracts. Its general advice to consumers: agree to the shortest term possible, don’t pay in advance in case they go broke, beware low initial prices used as bait.

(SHTRRROAM on bee tah   VECK cell n.)

Markttransparenzstelle

The new “Market Transparency Office,” under the auspices of the German Federal Cartell Authority. The MTO is intended to gather and evaluate data from electricity companies and especially gas stations to ensure there is no price fixing. These data will not be shared with the public. It is not clear whether this new office will be functional or grandstanding.

Update on 12 Sep 2013: Starting today, drivers will have access to the price data ~13,000 German gas stations have been sending to the federal cartel authority [Bundeskartellamt] since 31 Aug 2013. The bundled data are forwarded to several phone apps and “registered consumer protection centers” or “consumer portals” drivers can use to compare gas station prices in real time; price changes are updated to the market transparency office every five minutes. Beta testing is scheduled to end 01 Dec 2013.

The following consumer portals have been approved for this so far:

http://www.clever-tanken.de

http://www.spritpreismonitor.de

http://mehr-tanken.de

http://www.ADAC.de

http://tanken.t-online.de

Spiegel.de reported another eight “information services” have been approved to help share the price data with consumers and another hundred have applied for approval.

The Green party called this a placebo office, criticizing inter alia that it does not fix inflationary pricing malheurs committed by the refineries (which have the same ownership as some large gas station chains in some cases). Also, it doesn’t cover all fuels or 100% of the market because the smallest gas stations can apply to be exempted. Germany has about 14,000 gas stations, so ~1000 are not participating as the service is launched.

(MARKED trons par ENTS shtell ah.)

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