Vodafone, Verizon Accused By India's Home Ministry of Sharing Customer Details With UK's GCHQ

The Indian operations of Vodafone (NASDAQ:VOD) and Verizon (NYSE:VZ) shared details about their customers with Britain’s Government Communications Headquarters, or GCHQ, news reports said Monday, citing a December memo from the internal security division of India's Ministry of Home Affairs.

According to the home ministry's documents, cited by the media, Vodafone was giving "secret unlimited access to their network of under-sea cables, which carry much of world's phone calls and Internet traffic." The issue was raised by the ministry while examining a request from Vodafone India Limited for security clearance following the government's decision to allow U.K.-based Vodafone Plc to fully acquire its Indian business. Vodafone reportedly said that the company did not release customer details unless it was legally required to do so, according to the Hindu Business Line, a local newspaper.

"No such concern has been raised with us by the Indian Government. The Government of India’s approval of our FDI application states that it was cleared by the FIPB and CCEA after all necessary due diligence," the U.K. based telecom giant reportedly said, according to Moneycontrol.com, a local news website. "Vodafone complies with the law in all of our countries of operation, including -- in the case of our European businesses -- the EU Privacy Directive and EU Data Retention Directive."

The home ministry's documents reportedly claimed that "GCHQ's mass tapping operations has been built up over the past five years by attaching intercept probes to the transatlantic cables where they land on British shores," The Economic Times, a local newspaper, reported. "Intercept partners are paid for logistical assistance," the statement reportedly added.

The ministry's memo also reportedly asked the Department of Economic Affairs to hold off on approving Vodafone's acquisition of its Indian subsidiary because the company is involved in a tax dispute worth about $1.36 billion in India.

"Realignment of Vodafone India, without settling pending tax issues which may have ramification on similar deals with other entities, is not advisable from economic angle. The Department of Economic Affairs may consider those facts while processing FIPB proposal," the MHA note reportedly said, according to Moneycontrol.com.

A report from The Guardian in August, based on documents released by NSA whistleblower Edward Snowden, had also stated that, “Some of the world’s leading telecoms firms, including BT and Vodafone, are secretly collaborating with Britain’s spy agency GCHQ, and are passing on details of their customers’ phone calls, email messages and Facebook entries.”

New York-based Verizon, which offers data services in India from its operations in the southern Indian city of Chennai, also denied the home ministry's claims, Moneycontrol.com reported.