Bloomberg privacy revelations no big surprise to some
The surprise surrounding the crisis engulfing global business news giant Bloomberg may only be that it has taken so long to erupt.
Both the US Treasury Department and the Federal Reserve are reported to be examining the extent to which Bloomberg reporters tracked officials' use of information carried on the Bloomberg terminal, a device that dominates trading desks from New York to London and beyond.
Bloomberg employees are even said to have accessed details of ex-Fed chief Alan Greenspan's contacts with the company's help desk.
The probe follows revelations Goldman Sachs and JPMorgan Chase were angered that Bloomberg reporters were using the terminals to identify employees who might have left the two banks. Bloomberg's chief executive Dan Doctoroff has declared the practice a "mistake", and company executives have reportedly apologised in person to executives of Goldman Sachs, one of its biggest customers.
"Last month we changed our policy so that all reporters only have access to the same customer relationship data available to our clients," Mr Doctoroff said in a statement.
Whether the aggrieved customers will be satisfied with reduced reporter access remains to be seen, although apparently none of Bloomberg's 315,000 paying customers is known to have cancelled the service over the breach.
Even 10 years ago, many Bloomberg employees were familiar with the internal function on the terminal that allowed them to observe client use. The so-called UUID function identifies, for instance, whether a customer is interested in equities or bonds by revealing the number of times certain category keys are tapped.
On the one hand, such knowledge enabled Bloomberg to hone its service. A customer might be contacted to see if additional training was needed to boost usage and, therefore, dependence on the $20,000-a-year (at current rates) "machine". Such attention has helped swell annual sales to about $8 billion.
Still, it was clear even back then that clients might not welcome the one-way transparency of their activities. "Better not let on that we can see this information," might have summed up the internal sheepishness.
A more recent offering, though, may cause more concern on Wall Street and beyond. Given the ever-growing complexity of the Bloomberg offering, the near-instantaneous "help" function is likely to have been popular. Queries to the help desk about how to deploy complex analytics to determine the relative value of a particular asset, say Apple bonds, may inadvertently have helped tip off reporters.
The wide internal access to such interactions, including into what puzzles Alan Greenspan, may be less amusing if the Fed or other authorities suspect insider information at play.
And while financial markets are unlikely to lose their addiction to Bloomberg news and data, authorities might ask a bigger question: should a single firm be permitted to control about half a global industry even if it can keep its secrets.
The author is a former Bloomberg employee.