German parliament cuts ties with Verizon in wake of spying row

BERLIN (Reuters) - Germany's lower house of parliament has joined the government in cutting ties with U.S. telecoms firm Verizon Communications Inc (VZ.N), in reaction to a scandal last year over U.S. government spying and allegations firms were handing over data.

According to information disclosed by former U.S. intelligence contractor Edward Snowden, Washington conducted mass surveillance in Germany and even eavesdropped on Chancellor Angela Merkel's mobile phone.

The Bundestag lower house of parliament plans to end its contract with Verizon "as soon as possible," a government spokesperson told reporters on Friday. It had been due to run until the end of the year.

A day earlier the German Interior Ministry said the federal government would not renew its contract with the firm. The government needed a very high level of security, it said, and the NSA row had revealed ties between foreign intelligence agencies and companies.

Revelations of U.S. spying have prompted Germany to overhaul its internal communications and secure government networks. The decision to cut ties with Verizon are the first actions as a result. The government does not use U.S. firms for any other IT services, a spokesman said.

Deutsche Telekom AG DTEGn.DE is due to replace services provided by Verizon for the government. It already oversees the most sensitive communications between ministries or between the government and German intelligence agencies.

Verizon said on Thursday its German unit, Verizon Germany, is a German company and follows the country's laws.

The company has said it did not receive any demands from Washington in 2013 for data stored in other countries.

(Reporting by Emma Anderson and Thorsten Severin; editing by Ralph Boulton)