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These are stories Report on Business is following Monday, June 17, 2013.

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BlackBerry spies
British spies have reportedly succeeded in cracking the security of BlackBerrys, taking the surveillance controversy to a new level.

Today's report by The Guardian is the latest in a series of revelations about how government agencies around the world are snooping through online data of those using everything from Facebook to Hotmail.

This most recent report, however, ups the ante in that it shows how British intelligence agencies monitored calls and online communications of foreign delegations at two G20 summits in London four years ago. It also comes as Britain hosts a G8 summit that starts today.

That program was run by the Government Communications Headquarters, known as GCHQ, an electronic eavesdropping group.

They did this, according to The Guardian, by setting up Internet cafes at the summit at which they could intercept traffic, and using key-logging programs. Some 45 analysts tracked the data.

As The Guardian notes, however, the program was less aimed at security threats and more at "securing an advantage in meetings."

So far in this global controversy, attention has focused on how the U.S. National Security Agency ran a program known as Prism, aimed at scouring information from foreigners via e-mail, online chats, pictures, video conferencing and social networking. Companies caught up in the program included Apple Inc., Facebook Inc., Microsoft Corp., Yahoo Inc., YouTube, Skype and others.

There was no mention in U.S. documents, however, of Canada's Research In Motion Ltd. and its highly secure BlackBerry.

But documents seen by The Guardian suggest Britain's intelligence groups cracked it, though there are no details of what that involved.

"New converged events capabilities against BlackBerry provided advance copies of G20 briefings to ministers," according to a document reported by The Guardian.

"… Diplomatic targets from all nations have an MO of using smartphones. Exploited this use at the G20 meetings last year."

On its website, the newspaper posted part of the document, with bits blacked out.

Notable is a section that boasted of "recent successes," and what the GCHQ was able to provide British analysts and politicians during the summit, where BlackBerry devices were concerned:

"Delivered messages to analysts during the G20 in near real-time. Provided timely information to UK ministers. Enabled discovery of 20 new e-mail selectors."

These would have been older models of the BlackBerry.

"While we cannot comment on media reports regarding alleged government surveillance of telecommunications traffic, we remain confident in the superiority of BlackBerry's mobile security platform for customers using our integrated device and enterprise server technology," RIM said in a statement today.

"Our public statements and principles have long underscored that there is no 'back door' pipeline to that platform. Our customers can rest assured that BlackBerry mobile security remains the best available solution to protect their mobile communications."

According to The Guardian report, much of this was targeted at South Africa, whose government said today it was concerned.

"We do not yet have the full benefit of details reported on but in principle we would condemn the abuse of privacy and basic human rights particularly if it emanates from those who claim to be democrats," the Department of International Relations and Cooperation said in a statement.

"We have solid, strong and cordial relations with the United Kingdom and would call on their government to investigate this matter fully with a view to take  strong and visible action against any perpetrators."

The Guardian report came as Apple today joined other technology giants in disclosing details of government requests for customer data, pledging to try to "strike the right balance" between privacy and legal requests.

Apple received between 4,000 and 5,000 requests from U.S. agencies over the past six months, the company said in a statement posted on its website.

Between 9,000 and 10,000 accounts or devices were targeted by federal, state and municipal agencies, involving criminal and national security issues.

"The most common form of request comes from policy investigating robberies and other crimes, searching for missing children, trying to locate a patient with Alzheimer's disease, or hoping to prevent a suicide," Apple said.

"Regardless of the circumstances, our legal team conducts an evaluation of each request and, only if appropriate, we retrieve and deliver the narrowest possible set of information to the authorities," it added in the statement.

"In fact, from time to time when we see inconsistencies or inaccuracies in a request, we refuse to fulfill it."

Apple says it learned of the National Security Agency's Prism program only when details were published by media organizations.

"We do not provide any government agency with direct access to our servers, and any government agency requesting customer content must get a court order," it said, adding that it joined other companies for asking permission to disclose some details.

"Apple has always placed a priority on protecting our customers' personal data, and we don't collect or maintain a mountain of personal details about our customers in the first place," it said.

"There are certain categories of information which we do not provide to law enforcement or any other group because we choose not to retain it. For example, conversations which take place over iMessage and FaceTime are protected by end-to-end encryption so no one but the sender and receiver can see or read them. Apple cannot decrypt that data. Similarly, we do not store data related to customers' location, Map searches or Siri requests in any identifiable form."

Over the past few days, Microsoft disclosed that it received 6,000 to 7,000 demands in the second half of last year, while Facebook got 9,000 to 10,000.

Google has not yet disclosed the number of demands the Internet search giant received.

These requests run the gamut – from things like a local sheriff trying to find a missing child, to a federal marshal tracking a fugitive, to a police department investigating an assault, to a national security official investigating a terrorist threat," said Facebook general counsel Ted Ullyot.

The 9,000 to 10,000 requests involved between 18,000 and 19,000 user accounts, he added.

"With more than 1.1 billion monthly active users worldwide, this means that a tiny fraction of 1 per cent of our user accounts were the subject of any kind of U.S. state, local, or federal U.S. government request (including criminal and national security-related requests) in the past six months," Mr. Ullyot said.

"We hope this helps put into perspective the numbers involved, and lays to rest some of the hyperbolic and false assertions in some recent press accounts about the frequency and scope of the data requests that we receive."

Yesterday, the U.S. intelligence agencies said in a report that their phone snooping meant checking less than 300 phone accounts, adding they had been able to thwart dozens of terrorist plots.

Home prices rise
Canadian home sales slipped again in May from a year earlier, but prices continued to rise, according to a new reading today.

Home sales dipped 2.6 per cent from May of 2012, the Canadian Real Estate Association said, though climbed 3.6 per cent from April of this year.

That month-to-month increase was the best gain in almost two and one-half years, the group said.

According to the MLS home price index, prices rose 2.3 per cent, The Globe and Mail's Tara Perkins reports.

"Until recently, mixed sales trends across the country taken together had resulted consistently in a stable national trend," said Gregory Klump, the group's chief economist.

"The difference in May was that sales improved in so many markets at the same time," he said in the CREA report.

"The pop in Canada's resale housing numbers adds one more to a series of upbeat economic indicators that exceeded expectations in recent weeks. It's important not to put too much stock in one month's worth of data, but taken together with other recently published economic gauges, Canadian resale housing market results provide further evidence of the widely anticipated firming trend for Canadian economy."

The group also revised its forecast for the housing market this year and next, based on recent improving data.

It now projects sales of 443,400 this year and 464,300 next.

Construction strike could hit hard
Quebec's major business lobby says the province's economy is going to be hit hard if the labour conflict that has shut down construction sites isn't settled soon.

"Every day that is lost due to the labour conflict will result in additional costs that can only be harmful for the economy of Quebec and for all Quebeckers," Yves-Thomas Dorval, president of the Conseil du Patronat du Quebec, said today, The Globe and Mail's Bertrand Marotte reports.

The Conseil, representing the province's biggest employers, puts the anticipated value of private and public investment in construction projects for 2013 at about $50-billion, similar to last year.

The group says it's consulting with contractors to more closely assess the impact of the general strike, launched at midnight Sunday, that has paralysed most construction activity.

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