AT&T may face a tougher time convincing European officials to approve future takeover deals in light of its role in the NSA's surveillance program.
Like many other US companies, AT&T was compelled by the government to provide the National Security Agency with phone records of its customers as part of the agency's hunt for terrorist activity. At the same time, AT&T has expressed an interest in acquiring a mobile carrier in Europe as a way to expand its global presence.
But some European officials told The Wall Street Journal that approval for any acquisition deals might be more difficult to obtain given the current climate. AT&T would have to agree to follow European privacy laws, which would prevent it from providing customer data to the NSA and other US government agencies.
"Telecommunications companies that operate on German soil must hold themselves to German law," a spokeswoman for Germany's Economics Ministry told the Journal. "To transfer data to foreign intelligence agencies would be illegal."
Privacy concerns in Europe also have increased due to recent revelations that the NSA obtained access to the phone calls of German Chancellor Angela Merkel and other European leaders. The NSA said that it received the information from its European counterparts. But that claim is unlikely to instill much confidence in regulators trying to decide whether to approve a takeover deal from a US company.
"One would need to create transparency ahead of time so that everyone knows what the legal basis is" for how AT&T treats German data, Peter Schaar, Germany's federal commissioner for data protection, told the Journal. "The public and the regulators have become much more attentive now that we know, and also in part suspect, how far the surveillance goes."