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What You Need to Know About the Bloomberg Snooping Scandal

Danielle Kurtzleben

News broke this weekend that Bloomberg reporters had access to customer login information for the company's terminals, which provide people worldwide with realtime financial data. Customers who use Bloomberg's data include top Washington officials such as Ben Bernanke and Wall Street investment bankers. In response to customer privacy concerns, the news service has made login information unavailable to reporters.

For those who have never heard of a Bloomberg terminal, here is a roundup of what happened, what people are saying, and why the debate over privacy matters.

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What exactly did Bloomberg's reporters get to see?

To hear Bloomberg's leadership describe it, very little. But both investment firms and government officials are worried about their privacy, given the limited tabs that Bloomberg reporters could keep on them.

First, a primer: aside from providing news articles on finance and economics, Bloomberg also offers access to computer systems, known as "Bloomberg terminals," that give clients up-to-the-minute financial market data.

In a letter posted just after midnight on the Bloomberg site, Bloomberg News Editor-in-Chief Matthew Winkler reported that the journalists could see users' login histories and "high-level types of user functions on an aggregated basis," but nothing specific. He described it as "akin to being able to see how many times someone used Microsoft Word vs. Excel."

Then again, there are reports that Bloomberg reporters were able to view data on the highest-ranking economic officials in America, including keeping an eye on former Federal Reserve Chairman Alan Greenspan's contacts with the company's help desk. And on Saturday, CNBC reported that a Bloomberg journalist had accessed information on Fed Chairman Ben Bernanke and former Treasury Secretary Tim Geithner's terminal usage.

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How did this news come out?

The New York Post reported Friday that Goldman Sachs officials had learned that Bloomberg reporters could know exactly when and how often the investment banks employees logged into their terminals, and were complaining to Bloomberg.

From there, the story quickly mushroomed. The Federal Reserve and Treasury Department on Saturday said they would examine exactly how much journalists might know about their terminal usage.

By Monday morning, the story was the talk of the financial world, and both Winkler and Bloomberg CEO Daniel Doctoroff had posted responses to the controversy.

Doctoroff emphasized that the company considers the reporters' data access a mistake and said the company last month made immediate changes to its policies, giving reporters the same data access that the company's clients have.

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How long has this been going on?

Quite a while, according to Winkler's letter.

"The recent complaints go to practices that are almost as old as Bloomberg News," he wrote. "Since the 1990s, some reporters have used the terminal to obtain, as the Washington Post reported, 'mundane' facts such as log-on information."

So how much did this help the reporters?

It's hard to say. It's clear that reporters paid attention to the data; Buzzfeed reported Saturday that in 2011, a Bloomberg TV anchor mentioned terminal data usage in an on-air piece.

Still, the company maintains that the reporters' knowledge was far from specific: "At no time did reporters have access to trading, portfolio, monitor, blotter or other related systems. Nor did they have access to clients' messages to one another. They couldn't see the stories that clients were reading or the securities clients might be looking at," Winkler wrote in his Monday letter.

If reporters really didn't learn much from simply knowing when people logged on and off, the fight may be more about privacy than unfair advantage. The authors at popular finance blog Zero Hedge had a broad, measured response Monday morning to Bloomberg's problems: "While some in the media would suggest this is somehow critical insights that the Bloomberg reporters can use to completely understand what is going on in the world, we question the usefulness of knowing whether [New York Fed President] Bill Dudley is logged in," they wrote.

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