US explanation of Yahoo email scanning does not ‘satisfy’ the EU

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The United States has not satisfied the European Union’s concerns about Yahoo’s scanning of all customers’ incoming emails for US intelligence purposes, the bloc’s justice chief told Reuters in an interview.

The European Commission, the EU executive, asked the United States in November for clarifications on the secret court order served to Yahoo as part of its monitoring of a new transatlantic pact facilitating the exchange of personal data by businesses.

To clinch an agreement on the EU-US Privacy Shield, as the data transfer framework is known, Washington pledged not to engage in mass, indiscriminate surveillance.

That allayed Commission concerns for the privacy of Europeans’ data stored on US servers raised by disclosures of intrusive US surveillance programs in 2013 by former National Security Agency contractor Edward Snowden.

“I am not satisfied because to my taste the answer came relatively late and relatively general, and I will make clear at the first possible opportunity to the American side that this is not how we understand good, quick and full exchange of information,” EU Justice Commissioner Vera Jourova said in the interview.

While Yahoo is not signed up to the Privacy Shield and the scanning took place before the framework existed, the issue is a first test case of how the new system, which underpins €245 billion of trade in digital services, and the US commitments on spying work in practice, an EU official said.

The Privacy Shield allows businesses to seamlessly move Europeans’ personal data across the Atlantic, whether for completing credit card transactions, hotel bookings or analyzing browsing habits to serve targeted ads, while complying with strict EU data protection rules.

“I understand that the American side, when it comes to national security issues, cannot be fully concrete,” Jourova said.

Nevertheless, she said, she still expects more detailed information on what happened and the reasons for which Yahoo was asked to scan customer emails.

Reuters reported in October that Yahoo scanned all incoming emails for a digital signature linked to a foreign state sponsor of terrorism at the behest of an order from the Foreign Intelligence Surveillance Court.

The Privacy Shield foresees an annual review to ensure the United States is abiding by its commitments and that the framework is effective. The first annual review will take place this summer, under now President-elect Donald Trump.

Jourova said she was not concerned by the incoming Trump administration but that she would closely monitor what he would do with the US government’s presidential policy directive on US surveillance activities and a newly established US ombudsperson office in the State Department to handle complaints from EU citizens about US spying.

“I would expect that Trump’s administration would understand what is good and what is bad for business. This is good for business,” she said, referring to the Privacy Shield.

“We need to see that we can still trust.”

Altaba

Yahoo was already a shell of its former self. Now part of the company is getting an obscure new name: Altaba.

When Verizon agreed to buy the company for €4.5 billion in July, it planned to purchase just Yahoo’s core Internet businesses, which include its email service, sports verticals and various apps. What’s left of the embattled technology company would essentially be its ownership in the very valuable Chinese Internet giant Alibaba.

When the deal closes, the remaining part will change its name to Altaba, the company announced in security filings on Monday. The sale is expected to be completed by late March, Yahoo said.

The new name is meant to be a combination of the words “alternative and Alibaba,” according to a person familiar with the company’s thinking, who spoke on the condition of anonymity because the individual was not authorized to speak on the record about the name change.

Today Yahoo owns roughly 15 percent of Alibaba, holdings that are worth about €33 billion. The idea behind the name is that Altaba’s stock can now be tracked as an alternative to Alibaba because Yahoo owns a sizable chunk of the Chinese company.

The name change reflects just how far Yahoo has fallen. The company that was once an Internet giant and is still the third most visited Web property in the United States is now essentially a vehicle for holding Alibaba’s stock.

The new company, which will be publicly traded and until now has been referred to as RemainCo in security filings, also owns a 35.5 percent stake in Yahoo Japan, the company’s Japanese affiliate, and Yahoo’s cash, as well as a patent portfolio that is being sold off in a separate auction.

A Yahoo spokeswoman, Suzanne Philion, would not comment on the name. She emailed the following statement: “We are confident in Yahoo’s value and we continue to work towards integration with Verizon.”

The company also announced in the filings that Eric Brandt is now the chairman of Yahoo’s board. He is a former finance chief of semiconductor company Broadcom. Marissa Mayer remains chief executive and plans to step down from the board when the deal closes. Philion declined to comment further on these changes.