
Bloomberg Admits Terminal Snooping - antimora
http://www.nytimes.com/2013/05/13/business/media/bloomberg-admits-terminal-snooping.html?pagewanted=all&_r=0
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ig1
Essentially the issue is that the reporters had access to Bloomberg's internal
analytics/crm system.

Pretty much every single sophisticated SaaS company in the world collects this
data (login frequency, etc.) - it's invaluable for sales, support, debugging,
product management, etc. hence it also makes sense that the information is
widely available within the firm.

There's obviously an ethical issue in that Bloomberg's reporters shouldn't
have had access to that data, but it's worth noting that the information is
similar to what everyone else in the SaaS space is collecting.

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lmg643
I'm not sure how many SaaS companies are at the intersection of as many
critical business flows as Bloomberg is. And then, amongst those that are, how
many of them are tied to full blown news operations.

While I think the green dot/red dot controversy is overblown, the paranoia is
driven by the ubiquitous aspect of the terminals combined with the massive
number of workflows that are centralized on Bloomberg terminals. Here's a
sampling:

* Proprietary email and IM systems integral to interactions with customers and counterparties * Trading systems in virtually every asset class. TOMS, the fixed income system, is the defacto standard for bonds. * One of the top financial news gathering organizations * Best-in-class financial data and analytics

So when you think of what someone could do with access to the system, it
almost boggles the mind. Ability to know who is looking at what. Who is saying
what to whom. And in certain asset classes, the best possible data on who is
buying what. A rogue support person, for example, could do incredible damage
to the company. Hopefully they have good mechanisms to control that - the fact
that we haven't heard about it thus far is a good sign.

Given the overlap of workflows available on the terminals, plus the relatively
low-cost of extra features once you're already paying for the terminal, makes
me view Bloomberg as an anti-trust case waiting to happen. I wonder if they
think so too - and to feed more paranoia, I've wondered whether that explains
why Mayor Bloomberg is in politics. (Either that and/or to promote BGOV -
growth in the government sector as wall street retrenches).

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ig1
Bloomberg's main competitors are Thompson Reuters and News Corporation, both
of whom are substantially larger in revenues and market cap than Bloomberg
(although you could argue News Corps financial arm is smaller). So it seems
unlikely they'd be considered for an anti-trust case.

~~~
tptacek
Thompson Reuters financial revenues are comparable to Bloomberg's (I think
Bloomberg might be slightly ahead of them); Thompson Reuters also operates in
a bunch of businesses Bloomberg doesn't.

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bane
In retrospect I suppose this seems like it would be obvious that they'd use
client data this way. Bloomberg terminals are a weird beast. I don't have lots
of experience with them, but from what I've seen they're an amazing example of
the term "network effect".

They're basically leased windows computers with a dedicated application that
displays realtime market data. They run about $20k/yr. They come with a funky
keyboard, and the app has all sorts of messaging and searching functions into
a wide variety of markets. Typically, the average user uses only a tiny
fraction of the capability they have via these terminals (the pork belly
futures trader doesn't ever bother with high tech semiconductor trades).
Because everybody is on a Bloomberg terminal, and it has a dedicated messaging
system, you need a Bloomberg terminal to chat with other traders to make deals
- hence the network effect. It also marks you as a "serious" player, even
small offices with a couple guys will have these terminals.

Since Bloomberg has total vertical integration, from data source to keyboard,
it means they collect, or have the potential to collection incredible amounts
of information about their user community. Every chat, every query, every
trade, every login, logoff, every keypress.

So the unsurprising question is, why wouldn't other parts of Bloomberg have
access to some/all of this data? And even if everybody was terribly offended
by that, what are they going to do? They're pretty much locked in at this
point.

 _edit_ relevant WP <http://en.wikipedia.org/wiki/Bloomberg_Terminal>

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grey-area
_So the unsurprising question is, why wouldn't other parts of Bloomberg have
access to some/all of this data? And even if everybody was terribly offended
by that, what are they going to do? They're pretty much locked in at this
point._

Bloomberg are playing with fire here, partly because they're almost a
monopoly, and partly because they could be so easily replaced on the quotes
side (if not on the financial news market side). Technology has moved on and
exchanges are more open with data than they used to be, and this is probably
only going to continue - I'm sure they'd love to cut Bloomberg out of the
picture and charge their own fees separately.

There is no justification for Bloomberg journalists to be poking into private
account information about Bloomberg clients - the potential for abuse of this
position is huge, apart from anything else the journalists could use it for
insider trading, which is of course illegal. They could also take information
from one trader and sell it to a competitor, there is huge scope for abuse,
and the only way to avoid it is to have very clear (and tight) boundaries for
the usage of stats collected.

In the same way that newspapers have a firewall between editorial and
advertisers, to try to stop advertisers influencing editorial, Bloomberg
should have a firewall between the division which sells financial information
and that which investigates financial news in order to get that information. I
find it astonishing that so many people are defending this sort of privacy
invasion as standard practice. It's not acceptable to use information such as
queries and logins to measure specific individual actions and find out (for
example) how active a particular trader has been in a certain market, then
spread that information. It's fine to keep these stats and anonymise them in
order to generate statistics about usage, but quite another thing to use them
to track individuals and trading patterns. If Google for example used the
content of private emails from a CEO to target companies to sell adverts to,
there would be outrage, and rightly so.

~~~
ig1
Exchanges charge their own fees in any case which Bloomberg passes on to the
end client with no markup, hence they don't really care about the fact that it
goes through Bloomberg (in-fact because Bloomberg make it easy to subscribe to
new exchanges Bloomberg is probably a net positive for the exchanges).

Insider trading is a risk, but no-more so than with everyone else in the
financial industry. If you work in finance typically there's pretty tight
restrictions on what you're allowed to trade on a personal account (i.e. no
shorting, no holding equities for less than 30 days, etc.) and you have to
register any non-blind investments (both so things like insider trading can be
tracked but also to prevent conflicts of interest).

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raldi
Bloomberg LP grew up in a different era, when a client of a communication
service had no expectation of privacy from the company running it. You think
telegraph operators weren't snooping on what was being transmitted? Do you
know what the song _Wichita Lineman_ is about? Think the mailman doesn't keep
tabs on who's subscribing to Playboy?

Times have changed, though, and the expectation now is that users have
absolute privacy from their service provider except on a need-to-know basis,
and Bloomberg is going to have their work cut out for them adapting their
systems and culture.

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brandnewlow
If the mailman was also the editor of the local newspaper and was using his
knowledge of your subscriptions to source stories about you, that'd be much
more in line with what was going on here.

The problem is that Bloomberg sells data services to tens of thousands of
companies while also running a media company that sells reporting to news
organizations. You can't mix those two and expect people to be happy about it.

~~~
UVB-76
I may be wrong, but the impression I got from this article was not so much
that Bloomberg reporters were using the data to source stories _about_ their
clients, so much as using the data to connect with their clients and use them
as sources.

Whereas reporters from other news organizations would have had to ring around
and fight to speak to a relevant source, Bloomberg reporters had direct
contact details at their fingertips, as well as information telling them
exactly when they are logged in at their Bloomberg terminals.

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DannoHung
I'll be sincerely surprised if anything ultimately comes of this besides a
slap on the wrist. Firms are so dependent on Bloomberg to determine whether
their numbers are right that I can't imagine anyone migrating elsewhere
outside of very small sectors. Literally no one else has the coverage and
accuracy.

~~~
mathnode
Tradingscreen.

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hayksaakian
As someone unfamiliar with these 'terminals' the OP was extremely confusing.
Evidently, reporters had access to authorization timestamps of accounts for a
system that reported stock prices and new.

No credentials were exposed.

What's the issue?

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fiatmoney
Bloomberg has information about what you're looking at as well (far more than
just stock info; a wealth of information about just about every market &
market-relevant news). If you can tell what someone is looking at you can
easily infer they have a position in that market, which is very valuable (and
very proprietary) information. Furthermore you could look at overall flows and
make decent predictions about, eg, future volatility.

It had been speculated that Bloomberg employees were looking at the actual
content of searches, which would be a death blow to their reputation as a
trusted platform. This story is Bloomberg saying "Yes, we gave access to info
to employees we shouldn't have, but it was actually pretty banal."

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andrewcooke
how did gs find out?

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polskibus
[http://m.nypost.com/p/news/business/goldman_outs_bloomberg_s...](http://m.nypost.com/p/news/business/goldman_outs_bloomberg_snoops_ed7SopzVLaO02p9foS7ncM)

