April 1, 2023

Merkel Urges Europe to Tighten Internet Safeguards

Ms. Merkel’s remarks, in a television interview on Sunday night, reflected the anger throughout much of Europe, including Germany, over recent accounts of government surveillance by the United States National Security Agency. Those accounts, in government documents leaked by Edward J. Snowden, a former N.S.A. contractor, included the agency’s compilation of logs of virtually all telephone calls in the United States and its collection of e-mails of foreigners from the major American Internet companies, including Google, Facebook, Yahoo, Microsoft, Apple and Skype.

Those companies have already begun aggressive lobbying campaigns to stop or dilute tighter privacy rules, which they say would interfere with their business models and decrease profits and growth. The companies’ efforts are, in turn, supported by countries like England and Ireland that fear that such restrictions would hamper economic recovery.

Unlike many citizens in the United States, whose desire to prevent the kind of widespread terrorist attacks like those of Sept. 11, 2001, often trumps their concerns about privacy rights and government surveillance, Germans have experienced the corruption of those rights under the Nazis and later the Communist government of East Germany, making them far more sensitive to the issue. Until now, though, Germany has been slow to back an aggressive privacy initiative across Europe partly because the country’s laws are among the tightest in the bloc.

Ms. Merkel said she now believed that only a broader pact could be effective. “That has to be part of such a data privacy agreement because we have great regulation for Germany, but if Facebook is registered in Ireland, then it falls under Irish jurisdiction,” she said. “Consequently we need a common European agreement.”

Human rights groups in Germany and Austria, which has similarly strict rules guarding private information, have taken on the Internet giants over Facebook’s default settings on sharing personal data and Google’s scooping up of private information while mapping out German cities for its Street View service.

“What actually happens with data when they leave Germany to servers outside of the country, or Europe, where they fall under the jurisdiction of completely different regulations?” Ms. Merkel asked in the interview on Sunday with the public broadcast network ARD.

She pointed out that existing international accords on privacy protection were drawn up decades before the digital era, and she said she would meet in the coming days with her interior and justice ministers to draw up proposed regulations on data privacy that could apply across the entire 28-nation bloc.

Companies contacted by e-mail, including Google and Microsoft, did not immediately respond to requests for comment about Ms. Merkel’s remarks.

“We’re still investigating what she said, and in what context she said it,” said Lisa Randles, a spokeswoman for BSA, an alliance of software companies, including Apple and Microsoft

The European Union’s justice commissioner, Viviane Reding, who originally proposed rules overhauling and updating the bloc’s privacy standards in early 2012, praised “this commitment of Chancellor Merkel to strong and uniform E.U. data protection rules” in a statement on Monday in Brussels.

The N.S.A. revelations have placed an added political strain on Ms. Merkel, who polls suggest remains in a strong position before German elections in September but who is under increasing attack from opposition parties trying to use the matter to undercut her popularity.

“The question is whether this is part of election campaign tactics or something with real substance,” Jan Philipp Albrecht, a German member of the European Parliament who is the main sponsor of the legislation, said in a telephone interview on Monday. The legislation needs the Parliament’s approval to take effect.

Melissa Eddy reported from Paris, and James Kanter from Brussels.

Article source: http://www.nytimes.com/2013/07/16/world/europe/merkel-urges-europe-to-tighten-internet-safeguards.html?partner=rss&emc=rss

DealBook: Alibaba Is Said to Be Close to Raising $8 Billion

Employees at the headquarters of the e-commerce Alibaba.com subsidiary in Hangzhou, Zhejiang Province, in February.Nelson Ching/Bloomberg NewsEmployees at the headquarters of the e-commerce Alibaba.com subsidiary in Hangzhou, Zhejiang Province, in February.

Some American Internet companies may be unpopular with investors these days, but a Chinese one is finding plenty of takers.

The Alibaba Group, a Chinese e-commerce giant, is close to completing a more than $8 billion round of financing that will value it at as much as $43 billion in equity, according to two people briefed on the matter. Alibaba plans to use the bulk of that new money to buy back a 20 percent stake in itself from Yahoo for $7.1 billion. Yahoo owns 40 percent of Alibaba.

One Yahoo executive who signed off on that deal with Alibaba, Ross Levinsohn, announced on Monday that he was leaving the Internet company. The departure of Mr. Levinsohn, who served as Yahoo’s interim chief executive for three months, was expected after the company’s board hired Marissa Mayer from Google as its new leader.

With its financing nearly in place, Alibaba is prepared not only to solidify its position as the most valuable privately held Internet company but also to take a big step toward separating itself from Yahoo, which has struggled to revive its brand and stock price.

Alibaba’s financing round includes a $1.5 billion sale of convertible preferred shares, based on a $43 billion equity valuation for the company, and the sale of $2.6 billion in common shares, at a roughly $35 billion valuation, the people briefed on the matter said. They requested anonymity because the discussions are private. Alibaba is also close to borrowing $4 billion.

The agreement with Yahoo stipulated that Yahoo could receive more than $7.1 billion if its Chinese partner raised money at a significantly higher valuation than it is expected to. Yet because the sale of preferred shares and common shares are subject to certain discounts, Alibaba is still expected to pay close to the original amount.

Still, that price represents a big return on Yahoo’s investment.

Yahoo invested $1 billion in Alibaba about seven years ago, gaining a 40 percent stake in what was then seen as a promising Chinese start-up company.

Now the Alibaba 40 percent stake makes up more than half of Yahoo’s $20 billion market value. Under the agreement hashed out in May, Yahoo will sell back another 10 percent of Alibaba shares when the Chinese company goes public and divest itself of the rest at later date.

Shares of Yahoo fell nearly 1 percent on Monday to close at $15.98 per share.

The two companies have butted heads a number of times in recent years. Alibaba’s decision in 2010 to spin off its Alipay online payment business prompted protests from Yahoo that it had not been properly consulted. The dispute was not settled until last summer.

Alibaba has long sought to buy back Yahoo’s interest in itself, though attempts to reach an agreement fell apart many times. Irritated that Yahoo was considering selling a minority stake in itself to investor groups last year, Alibaba threatened to wage a hostile takeover attempt to try to forestall such a possibility. The American company eventually abandoned the idea.

Alibaba is raising billions of dollars from a patchwork of international backers. Nearly a dozen investors, including hedge funds, sovereign wealth funds, mutual funds and private equity firms, will buy the preferred shares, these people said. The China Investment Corporation, that country’s sovereign wealth fund, will participate in the purchase of the common shares. The China Development Bank, is expected to provide a substantial portion of the loan to Alibaba.

Joseph C. Tsai, Alibaba’s chief financial officer, who has led the company’s fund-raising efforts, tried to limit the financing round to a small group of investors to restrict access to Alibaba’s financial information, one of the people briefed on the financing matter said.

The rapid rise of Alibaba, a collection of Chinese consumer and business-to-business e-commerce sites, illustrates how quickly momentum can shift on the global Web. Seven years ago, the company was eager for a capital infusion amid intensifying competition from domestic and international rivals like eBay, which owned an online auction site named Eachnet. In 2004, the year before Yahoo’s investment, Alibaba recorded just $68 million in revenue.

Since then, Alibaba’s sales have swelled.

In the first half of this year, Alibaba recorded a little more than $1.8 billion in revenue, more than 60 percent more than in the year-earlier period, people with knowledge of the matter said.

In contrast, Yahoo has fallen nearly as swiftly. In early 2008, Yahoo spurned a takeover offer from Microsoft — a bid that valued it at roughly $45 billion. Since then, Yahoo’s slumping advertising sales have slumped and it has lost market share to companies like Google and Facebook. Its shares, since its Alibaba investment, have lost more than half their value.

In an effort to appease investors, Yahoo has said the proceeds of Alibaba’s purchase will be returned to shareholders, possibly through a share buyback program.

Alibaba is expected to complete the repurchase of the 20 percent stake in the beginning of the fourth quarter.

Article source: http://dealbook.nytimes.com/2012/07/30/alibaba-is-said-to-be-close-to-raising-8-billion/?partner=rss&emc=rss