Was America Snooping On Europe?

In the bad old days of the cold war, America spied on its enemies in the interest of national security. Now, says a report debated last week by the European Parliament, it is snooping on its friends in the name of economic dominance. According to the report, written by British journalist Duncan Campbell, the United States is using an old network of high-tech listening posts--code-named Echelon--to eavesdrop on leading EU companies. Then it uses that information to help U.S. firms beat foreign competitors to contracts. "The level of use is out of control," said Campbell.

Washington denies that it has used the system improperly. But that hasn't curbed Europe's outrage. French Foreign Minister Elisabeth Guigou has cautioned businesses over transmitting confidential data. And a group of French companies who believe they lost business through Echelon's spying is threatening a joint lawsuit.

America won't be alone in the dock. Echelon is a joint partnership of America, Canada, Australia, New Zealand and Britain. Despite denials from Prime Minister Tony Blair, critics believe that the United States may be sharing secrets with Britain. If true, that would confirm the EU's worst suspicions: Britain is closer to its American cousins than its European partners.