Internet giants' plea for exemption fails to convince Communications Minister.

The Government has knocked back a bid from the world's biggest internet companies to be exempted from controversial new electronic eavesdropping legislation.

Earlier this month Facebook, Microsoft, Google and Yahoo wrote to Communications Minister Amy Adams to emphasise their concerns about the Telecommunications Interception Capability and Security Bill which has its second reading in Parliament today.

The bill, companion legislation to the recently passed Government Communications and Security Bureau (GCSB) Act, sets out the access that network operators and internet service companies must give to spy agencies to allow them to monitor communications.

Crucially, it also allows the minister responsible for intelligence agencies to place interception obligations on so-called "over the top" service providers like Facebook, Microsoft, Google and Yahoo who offer messaging as part of their services.


In their letter, the four companies said requiring them to make their systems interception-capable for New Zealand spy agencies "would present serious legal conflicts for companies headquartered in other countries".

The companies also said the proposed new regime was inconsistent with the models in other member countries of the "Five Eyes" spying network which the GCSB contributes to.

The companies said there were already international legal mechanisms for New Zealand law enforcement organisations to obtain the information they needed. They also proposed an "alternative approach" under which the process for local law enforcement agencies to engage with their US counterparts was improved, and the New Zealand Government set up a "single point of contact" for requests for information from overseas companies.

However, in her response, Ms Adams said there was "a proper administrative process" to follow before overseas-based companies would be obliged to provide interception capability. That process would ensure that issues around conflicts of laws between New Zealand and companies' home jurisdictions were addressed.

She did not agree the bill would place service providers in the position of complying with conflicting legal requirements and told the companies their proposed alternative approach was not "sufficient to achieve the objectives of the bill".

However, Ms Adams yesterday announced a series of tweaks to the bill, including the removal of Clause 39 which allows the Government to block an overseas company from offering services in New Zealand if it lacked interception capability in a way that presented a risk to national security.

What the Big Four say
*Facebook, Microsoft, Google and Yahoo's criticism of the Telecommunications Interception Capability and Security Bill:
*It now covers all overseas-based internet service providers who offer services in New Zealand.
*It will potentially conflict with laws in the US where they are based.
*Its overseas reach is unnecessary as existing international legal mechanisms already allow New Zealand law enforcement agencies to obtain necessary information.
*Any enforcement action taken against overseas service providers will be costly and time-consuming.