The Germany has cancelled contract with U.S. telecoms firm Verizon, as a fallout of the US NSA spying on Berlin.
Former U.S. intelligence contractor Edward Snowden’s disclosures alleged Washington had conducted mass surveillance in Germany and had even eavesdropped on Chancellor Angela Merkel's mobile phone.
Berlin subsequently demanded talks with Washington on a "no-spy" deal, but these collapsed after the United States appeared unwilling to give the assurances Germany wanted.
Germany also launched an overhaul of its internal communications and secure government networks. This is one of the first actions involving a U.S. firm to result.
"The pressures on networks as well as the risks from highly developed viruses or Trojans are rising," Germany's Interior Ministry said in a statement to the Reuters on Thursday.
"Furthermore, the ties revealed between foreign intelligence agencies and firms in the wake of the U.S. National Security Agency (NSA) affair show that the German government needs a very high level of security for its critical networks.”
Verizon did not receive any demands from Washington in 2013 for data stored in other countries, the company said.
"The U.S. government cannot compel us to produce our customers' data stored in data centers outside the U.S., and if it attempts to do so, we would challenge that attempt in a court," it added.