Auction for A123 Systems Won by Wanxiang Group of China

DETROIT — Wanxiang Group, a large Chinese auto parts maker, won a high-stakes auction on Sunday for assets of A123 Systems, the bankrupt American battery maker that was a centerpiece of the Obama administration’s loan program for electric vehicles.

A123, which filed for bankruptcy in October after chronic losses and a damaging battery recall, said Wanxiang agreed to pay $256 million for its automotive and commercial operations, including its three factories in the United States.

But the sale excludes A123’s business with the United States government and its military contracts. That portion of the company will be sold to a small energy company based in Illinois, Navitas Systems, for $2.2 million.

Spinning off the government-related business to an American buyer was meant to quell concerns about transferring sensitive military technology to the Chinese, said A123’s chief executive, David Vieau.

“We think we have structured this transaction to address potential national security concerns,” he said in a statement.

From the start, some Republicans in Congress have opposed Wanxiang’s efforts to buy A123, which received a $249 million federal grant to spur domestic manufacturing of batteries.

The deal, which requires approval of a United States bankruptcy judge, would expand Wanxiang’s share of the global market for lithium-ion batteries used in new electric cars like the Fisker Karma.

The A123 sale is the latest in a series of acquisitions of North American energy and manufacturing companies by state-owned and privately held Chinese firms.

Last week, the Canadian government cleared a $15 billion takeover of Nexen, the energy giant, by the state-owned China National Offshore Oil Corporation, or Cnooc.

Wanxiang outbid three other companies in the auction conducted for the bankruptcy court by the Chicago law firm Latham & Watkins. One of the three, Johnson Controls, based in Wisconsin, had tried to buy A123 as it was entering bankruptcy.

But Wanxiang has been in aggressive pursuit of A123 since earlier this year, when the Chinese company first offered emergency loans to keep the failing battery maker afloat.

The president of Wanxiang’s fast-growing American subsidiary, Pin Ni, said the deal would accelerate its growth in the American automotive and alternative-fuel industries. “We think adding A123 to our portfolio of businesses strongly aligns with our strategy of investing in automotive and clean tech industries in the U.S.,” he said.

The subsidiary, Wanxiang America, which is based near Chicago, owns several auto-parts firms and other companies and employs 3,000 American workers.

But the A123 deal is by far its most prominent and riskiest acquisition.

In addition to the approval of the bankruptcy judge, the deal requires the approval of the Committee on Foreign Investment in the United States, a broad-based group led by the Treasury Department that reviews foreign takeovers of American companies.

Mr. Ni expressed confidence that Wanxiang was the best owner for A123, when it would need considerable investment to meet production commitments for automakers like Fisker Automotive and General Motors. “We are committed to making the long-term investments necessary for A123 to be successful,” he said.

A123, which is based in Waltham, Mass., was once one of the most promising recipients of federal loans under the Obama administration’s $2 billion program to stimulate the electric-car industry in the United States.

But consumers have been slow to buy electric vehicles in large numbers, crippling any chance for A123 to make a profit. It also stumbled when its first big shipment of batteries to Fisker proved defective and needed to be recalled.

The company’s bankruptcy became a political issue in the recent presidential campaign, and its potential sale to Wanxiang has fueled concerns that China will benefit from technology developed with financing by American taxpayers.

One member of Congress, Marsha Blackburn, Republican of Tennessee, wrote in a blog, “The Hill,” on Friday that any sale of A123 to the Chinese had “significant implications” for American national interests.

At least two dozen other members of Congress have also opposed the deal, along with the Strategic Materials Advisory Council, a group of former American military and industry leaders.

“The writing is on the wall,” Ms. Blackburn wrote. “The administration must review and then reject any deal involving Wanxiang.”

The bankruptcy auction began last week, when Wanxiang, Johnson Controls, and the electronics makers NEC Corporation of Japan and Siemens AG of Germany submitted secret bids for A123’s assets.

The agreement announced by A123 on Sunday said that Wanxiang made the highest bid, but did not disclose the other offers.

According to the deal, Wanxiang would acquire A123’s automotive, electric-grid and commercial business assets, including all of its technology, products, customers, and factories in Michigan, Massachusetts and Missouri, which will continue to operate.

Wanxiang would also take control of A123’s fledgling operations in China, including its interest in a joint battery venture with Shanghai Automotive, the country’s biggest carmaker.

A123’s much smaller government division, which is concentrated in Michigan, will go to the little-known Navitas Systems.

There was no immediate comment from Navitas, which is described on its Web site as a newly formed company offering integrated design and technology for the energy-storage industry.

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Italy Grapples With Polluting by Ilva, a Giant Steel Maker

Alessandro Penso for The New York Times

The Ilva steel plant, in Taranto, Italy, above, employs thousands of workers but is seen as a health threat by residents and courts.

TARANTO, Italy — Every morning, Graziella Lumino cleans the black soot from her kitchen window, which looks out on the hulking Ilva steel plant where her husband, Giuseppe Corisi, worked for 30 years.

After he died this year at the age of 64 from violent, sudden-onset lung cancer, his friends put a plaque on the wall of their apartment building: “Here lived the umpteenth death from lung cancer. Taranto, March 8, 2012.”

Today, Ilva, which is among the largest plants in Europe and produces more than 30 percent of Italy’s raw steel, is at the heart of a clash over the future of Italian industry, one that pits economic concerns against environmental ones and the power of the government against the judiciary amid Italy’s struggle to compete in a global economy.

After a court ordered sections of the plant closed and steel from it impounded last month, arguing that it had violated environmental laws and was raising serious health concerns in the area, the government passed an emergency decree that would allow it to continue operating while cleaning up its act, saving 20,000 jobs nationwide. Magistrates said that the new law, which must be approved by Parliament, violated the Constitution by allowing the executive branch to circumvent the judiciary.

In many ways, the Ilva plant is an emblem of the Italian economy that the technocratic government of Prime Minister Mario Monti inherited last year and has been trying to repair before elections expected early next year. It is the product of decades of physical and political neglect, an aging industrial giant that came of age in the economic boom of the late 20th century and is struggling to keep pace in the 21st.

For Italy, though, the plant is too big to fail. It produces about 8 percent of European steel — and the government estimates that stopping production would cost the Italian economy more than $10 billion a year.

But the environmental concerns are real. Dark plumes of smoke billow from stacks dominating the landscape, while dust from the plant stains the white tombstones in the local cemetery a rusty pink. An ordinance forbids children from playing in unpaved lots. In 2008, a local farmer was forced to slaughter 2,000 sheep after they were deemed contaminated with dioxin.

Some studies have found that cancer rates in Taranto, an ancient harbor in the heel of Italy’s boot, are over 30 percent higher than the national average, and far higher for certain cancers, particularly of the lungs, kidneys and liver, as well as melanomas.

Bruno Ferrante, the president of Ilva, said that the Riva Group, which owns the plant, has been spending from $325 million to $400 million a year to upgrade the plant since it bought it in 1995.

Mr. Ferrante added that cancer rates had been falling recently — government-approved studies bear that out — but acknowledged that there was more to be done. “The pink dust is certainly a problem, and we are aware of it,” he said.

Arguments about the plant’s economic importance fall on deaf ears here. “Health comes first,” Ms. Lumino said, sitting in her apartment with photos of her husband, including one on a chain that hung from her neck. He was one of many Ilva workers sent into early retirement in 1998 after the plant found evidence of asbestos contamination. “If you have money but not your health, what good is it?” she asked.

Ms. Lumino remembered a time before the plant was built. “There were farms, clean air, olive and almond trees,” she said. “We would picnic by the coast every Easter Monday.”

Even with the new decree, the conflict is far from over. The decree orders the Riva Group to invest $3.8 billion to reduce its emissions and bring the plant up to code before 2016, the deadline for other European countries to modernize.

If Riva fails to do so, the new law would give the government more powers to intervene. If Riva is unable to raise enough money to modernize, it could ask for European Union subsidies or sell the plant, which could jeopardize Italy’s European standing.

Brazilian companies are already eying Ilva, according to Italian news media reports. Mr. Ferrante said that Riva had no intention of selling and had a “pretty significant” ability to borrow more money and also draw on European Union cofinancing.

Gaia Pianigiani contributed reporting.

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Italy Grapples With Polluting by Ilva, a Giant Steel Maker

Alessandro Penso for The New York Times

The Ilva steel plant, in Taranto, Italy, above, employs thousands of workers but is seen as a health threat by residents and courts.

TARANTO, Italy — Every morning, Graziella Lumino cleans the black soot from her kitchen window, which looks out on the hulking Ilva steel plant where her husband, Giuseppe Corisi, worked for 30 years.

After he died this year at the age of 64 from violent, sudden-onset lung cancer, his friends put a plaque on the wall of their apartment building: “Here lived the umpteenth death from lung cancer. Taranto, March 8, 2012.”

Today, Ilva, which is among the largest plants in Europe and produces more than 30 percent of Italy’s raw steel, is at the heart of a clash over the future of Italian industry, one that pits economic concerns against environmental ones and the power of the government against the judiciary amid Italy’s struggle to compete in a global economy.

After a court ordered sections of the plant closed and steel from it impounded last month, arguing that it had violated environmental laws and was raising serious health concerns in the area, the government passed an emergency decree that would allow it to continue operating while cleaning up its act, saving 20,000 jobs nationwide. Magistrates said that the new law, which must be approved by Parliament, violated the Constitution by allowing the executive branch to circumvent the judiciary.

In many ways, the Ilva plant is an emblem of the Italian economy that the technocratic government of Prime Minister Mario Monti inherited last year and has been trying to repair before elections expected early next year. It is the product of decades of physical and political neglect, an aging industrial giant that came of age in the economic boom of the late 20th century and is struggling to keep pace in the 21st.

For Italy, though, the plant is too big to fail. It produces about 8 percent of European steel — and the government estimates that stopping production would cost the Italian economy more than $10 billion a year.

But the environmental concerns are real. Dark plumes of smoke billow from stacks dominating the landscape, while dust from the plant stains the white tombstones in the local cemetery a rusty pink. An ordinance forbids children from playing in unpaved lots. In 2008, a local farmer was forced to slaughter 2,000 sheep after they were deemed contaminated with dioxin.

Some studies have found that cancer rates in Taranto, an ancient harbor in the heel of Italy’s boot, are over 30 percent higher than the national average, and far higher for certain cancers, particularly of the lungs, kidneys and liver, as well as melanomas.

Bruno Ferrante, the president of Ilva, said that the Riva Group, which owns the plant, has been spending from $325 million to $400 million a year to upgrade the plant since it bought it in 1995.

Mr. Ferrante added that cancer rates had been falling recently — government-approved studies bear that out — but acknowledged that there was more to be done. “The pink dust is certainly a problem, and we are aware of it,” he said.

Arguments about the plant’s economic importance fall on deaf ears here. “Health comes first,” Ms. Lumino said, sitting in her apartment with photos of her husband, including one on a chain that hung from her neck. He was one of many Ilva workers sent into early retirement in 1998 after the plant found evidence of asbestos contamination. “If you have money but not your health, what good is it?” she asked.

Ms. Lumino remembered a time before the plant was built. “There were farms, clean air, olive and almond trees,” she said. “We would picnic by the coast every Easter Monday.”

Even with the new decree, the conflict is far from over. The decree orders the Riva Group to invest $3.8 billion to reduce its emissions and bring the plant up to code before 2016, the deadline for other European countries to modernize.

If Riva fails to do so, the new law would give the government more powers to intervene. If Riva is unable to raise enough money to modernize, it could ask for European Union subsidies or sell the plant, which could jeopardize Italy’s European standing.

Brazilian companies are already eying Ilva, according to Italian news media reports. Mr. Ferrante said that Riva had no intention of selling and had a “pretty significant” ability to borrow more money and also draw on European Union cofinancing.

Gaia Pianigiani contributed reporting.

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You for Sale: Company Envisions ‘Vaults’ for Personal Data

Peter DaSilva for The New York Times

Michael Fertik, the founder and chief executive of Reputation.com, at its offices in Redwood City, Calif., where he has amassed a database of information collected on millions of consumers.

“YOU are walking around naked on the Internet and you need some clothes,” says Michael Fertik. “I am going to sell you some.”

Naked? Not exactly, but close.

Mr. Fertik, 34, is the chief executive of Reputation.com, a company that helps people manage their online reputations. From his perch here in Silicon Valley, he views the digital screens in our lives, the smartphones and the tablets, the desktops and the laptops, as windows of a house. People go about their lives on the inside, he says, while dozens of marketing and analytics companies watch through the windows, sizing them up like peeping Toms.

By now many Americans are learning that they are living in a surveillance economy. “Information resellers,” also known as “data brokers,” have collected hundreds to thousands of details — what we buy, our race or ethnicity, our finances and health concerns, our Web activities and social networks — on almost every American adult. Other companies that specialize in ranking consumers use computer algorithms to covertly score Internet users, identifying some as “high-value” consumers worthy of receiving pitches for premium credit cards and other offers, while dismissing others as a waste of time and marketing money. Yet another type of company, called an ad-trading platform, profiles Internet users and auctions off online access to them to marketers in a practice called “real-time bidding.”

As these practices have come to light, several members of Congress, and federal agencies, have opened investigations.

At least for now, however, these companies typically do not permit consumers to see the records or marketing scores that have been compiled about them. And that is perfectly legal.

Now, Mr. Fertik, the loquacious, lion-maned founder of Reputation.com, says he has the free-market solution. He calls it a “data vault,” or “a bank for other people’s data.”

Here at Reputation.com’s headquarters, a vast open-plan office decorated with industrial-looking metal struts and reclaimed wood — a discreet homage to the lab where Thomas Edison invented the light bulb — his company has amassed a database on millions of consumers. Mr. Fertik plans to use it to sell people on the idea of taking control of their own marketing profiles. To succeed, he will have to persuade people that they must take charge of their digital personas.

Pointing out the potential hazards posed by data brokers and the like is part of Mr. Fertik’s M.O. Covert online profiling and scoring, he says, may unfairly exclude certain Internet users from marketing offers that could affect their financial, educational or health opportunities — a practice Mr. Fertik calls “Weblining.” He plans to market Reputation.com’s data vault, scheduled to open for business early next year, as an antidote.

“A data privacy vault,” he says, “is a way to control yourself as a person.”

Reputation.com is at the forefront of a nascent industry called “personal identity management.” The company’s business model for its vault service involves collecting data about consumers’ marketing preferences and giving them the option to share the information on a limited basis with certain companies in exchange for coupons, say, or status upgrades. In turn, participating companies will get access both to potential customers who welcome their pitches and to details about the exact products and services those people are seeking. In theory, the data vault would earn money as a kind of authorization supervisor, managing the permissions that marketers would need to access information about Reputation.com’s clients.

To some, the idea seems a bit quixotic.

Reputation.com, with $67 million in venture capital, is not making a profit. Although the company’s “privacy” products, like removing clients’ personal information from list broker and marketing databases, are popular, its reputation management techniques can be controversial. For instance, it offers services meant to make negative commentary about individual or corporate clients less visible on the Web.

And there are other hurdles, like competition. A few companies, like Personal, have already introduced vault services. Also, a number of other enterprises have tried — and quickly failed — to sell consumers on data lockers.

Even so, Mr. Fertik contends Reputation.com has the answer. The company already has several hundred thousand paying customers, he says, and patents on software that can identify consumers’ information online and score their reputations. He intends to show clients their scores and advise them on how to improve them.

“You can’t just build a vault and wish that vendors cared enough about your data to pay for it,” Mr. Fertik says. “You have to build a business that gives you the lift to accumulate a data set and attract consumers, the science to create insights that are valuable to vendors, and the power to impose restrictions on the companies who consume your data.”

THE consumer data trade is large and largely unregulated.

Companies and organizations in the United States spend more than $2 billion a year on third-party data about individuals, according to a report last year on personal identity management from Forrester Research, a market research firm. They spend billions more on credit data, market research and customer data analytics, the report said.

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Memo From Italy: In Italy, Mario Monti Morphs From Technocrat to Politician

ROME — For months, he had flirted with the idea of staying out of politics, but in the end former Prime Minister Silvio Berlusconi just could not resist. His statement on Saturday that he would seek office again out of a sense of “responsibility” for Italy effectively ended the mandate of Prime Minister Mario Monti, who said he would step down after Parliament passes a budget bill this month.

Mr. Monti’s surprise announcement on Saturday raised the prospect of more political uncertainty and market turmoil for Italy, Europe’s fourth-largest economy, in what is expected to be a gloves-off political campaign. But it also increased the possibility that Mr. Monti might run as a candidate — a shift from the role of an apolitical leader — who is open to governing if no clear winner emerges from elections expected as soon as February.

Three years into Europe’s debt crisis, the new developments in Italy underscored the clash between the economically sound and the politically sustainable. While Mr. Monti, an economist and a former European commissioner, has reassured investors and helped keep Italian borrowing rates down, the tax increases and spending cuts passed by his Parliament have eroded lawmakers’ standing with voters.

Mr. Monti’s grasp of economics and experience in European politics made him a power broker who took regular calls from the White House and worked with France and Spain to wring euro-zone concessions from a reluctant German chancellor, Angela Merkel.

“He’s ushered in a turning point in Italian politics and has been a major influence in Europe,” said Thomas Klau, director of the Paris office of the European Council on Foreign Relations. “He has helped turn Italy into a serious country again in the eyes of foreign investors and also many of its own citizens.”

Even if Mr. Monti decides not to run as a political candidate, his decision to step down sets the stage for a battle that pits him — a subtly ironic technocrat who attended Wagner’s “Die Lohengrin” at La Scala on Friday — against Mr. Berlusconi, who made his announcement at the training site of his soccer team, A. C. Milan.

“The war will be between Monti and Berlusconi,” said Massimo Franco, chief political commentator for the newspaper Corriere della Sera. “The moderate votes are in play, not the leftist ones.”

Although Mr. Berlusconi said he was motivated by a sense of responsibility, European leaders and market analysts immediately accused him of the opposite. Martin Schulz, president of the European Parliament, called his return to politics “a threat for Italy and Europe,” the ANSA news agency reported.

With the aid of Mario Draghi, president of the European Central Bank, Mr. Monti calmed the financial markets this year, but investors and European leaders now worry that many of Mr. Monti’s initiatives could be undone by future governments.

In an interview with the business newspaper Il Sole 24 Ore, José Manuel Barroso, president of the European Commission, said that Italy was at risk of being hit by deeper financial problems. “The next elections must not serve as a pretext for putting in doubt how indispensable these measures are,” he said. “The relative calm on the markets does not mean we are out of the crisis.”

Analysts said that Mr. Monti’s decision to step down ahead of schedule was aimed at preventing Mr. Berlusconi from running a campaign that undermined him. Mr. Berlusconi, always attuned to the national mood, even of voters increasingly weary of him, now looks poised to run a populist campaign that will criticize Mr. Monti for foisting unpopular measures on Italians and that may attack the adoption of a single currency for eroding Italian sovereignty.

Stepping down now, rather than early next year, as was expected, also puts Mr. Monti in the fray. “Monti becomes a politician at this point,” said Stefano Folli, a political columnist for Il Sole 24 Ore. “If Monti helps create a space on the ballot for an electoral alliance that recognizes the seriousness of what has been achieved, this could create a new political balance. That’s the challenge.”

Polls show that the center-left Democratic Party is likely to place first in elections, but without enough votes for a majority. But the party remains divided over which ally to choose to form a government.

Mr. Berlusconi is expected to secure enough votes to stay in Parliament and keep his immunity from prosecution in various trials, but not enough votes to govern.

“It is extremely unlikely that we will see a dynamic unfolding which would bring Mr. Berlusconi back to power,” Mr. Klau said. “So even if Mr. Monti were to leave the political stage for good, we would not go back to the political situation we were in before.”

Although Parliament has blocked some of the measures on Mr. Monti’s agenda — in recent weeks, lawmakers have proposed more than 1,500 amendments to the budget bill — the budget is likely to be approved, as is a law that requires Italy to balance its budget each year.

But analysts said that other changes aimed at improving Italy’s competitiveness were at risk. And before the end of the legislative session this month, lawmakers must also vote on a bill that would simplify the tax code, another meant to streamline the cumbersome bureaucracy and a measure that to allow the Ilva steel plant — a major economic engine for Italy — to stay open while it modernizes to meet environmental standards.

As the debt crisis has lingered, such local issues, as well as Italy’s chaotic political system, have taken on international importance.

On Sunday, Ferruccio de Bortoli, the editor in chief of Corriere della Sera, offered his review of the political drama: “The ‘Lohengrin’ at La Scala ended in applause. The Italian tragedy continues. The libretto still needs writing, so does the music. The guaranteed audience is international, but unfortunately not terribly forgiving about the cast. The curtain never falls.”

Reporting was contributed by Elisabetta Povoledo from Rome, Stephen Castle from London and Jack Ewing from Frankfurt.

This article has been revised to reflect the following correction:

Correction: December 9, 2012

An earlier version of this story stated that the the Ilva steel plan was responsible for 8 million euro. The correct number was 8 billion euro.

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You for Sale: Company Envisions ‘Vaults’ for Personal Data

Peter DaSilva for The New York Times

Michael Fertik, the founder and chief executive of Reputation.com, at its offices in Redwood City, Calif., where he has amassed a database of information collected on millions of consumers.

“YOU are walking around naked on the Internet and you need some clothes,” says Michael Fertik. “I am going to sell you some.”

Naked? Not exactly, but close.

Mr. Fertik, 34, is the chief executive of Reputation.com, a company that helps people manage their online reputations. From his perch here in Silicon Valley, he views the digital screens in our lives, the smartphones and the tablets, the desktops and the laptops, as windows of a house. People go about their lives on the inside, he says, while dozens of marketing and analytics companies watch through the windows, sizing them up like peeping Toms.

By now many Americans are learning that they are living in a surveillance economy. “Information resellers,” also known as “data brokers,” have collected hundreds to thousands of details — what we buy, our race or ethnicity, our finances and health concerns, our Web activities and social networks — on almost every American adult. Other companies that specialize in ranking consumers use computer algorithms to covertly score Internet users, identifying some as “high-value” consumers worthy of receiving pitches for premium credit cards and other offers, while dismissing others as a waste of time and marketing money. Yet another type of company, called an ad-trading platform, profiles Internet users and auctions off online access to them to marketers in a practice called “real-time bidding.”

As these practices have come to light, several members of Congress, and federal agencies, have opened investigations.

At least for now, however, these companies typically do not permit consumers to see the records or marketing scores that have been compiled about them. And that is perfectly legal.

Now, Mr. Fertik, the loquacious, lion-maned founder of Reputation.com, says he has the free-market solution. He calls it a “data vault,” or “a bank for other people’s data.”

Here at Reputation.com’s headquarters, a vast open-plan office decorated with industrial-looking metal struts and reclaimed wood — a discreet homage to the lab where Thomas Edison invented the light bulb — his company has amassed a database on millions of consumers. Mr. Fertik plans to use it to sell people on the idea of taking control of their own marketing profiles. To succeed, he will have to persuade people that they must take charge of their digital personas.

Pointing out the potential hazards posed by data brokers and the like is part of Mr. Fertik’s M.O. Covert online profiling and scoring, he says, may unfairly exclude certain Internet users from marketing offers that could affect their financial, educational or health opportunities — a practice Mr. Fertik calls “Weblining.” He plans to market Reputation.com’s data vault, scheduled to open for business early next year, as an antidote.

“A data privacy vault,” he says, “is a way to control yourself as a person.”

Reputation.com is at the forefront of a nascent industry called “personal identity management.” The company’s business model for its vault service involves collecting data about consumers’ marketing preferences and giving them the option to share the information on a limited basis with certain companies in exchange for coupons, say, or status upgrades. In turn, participating companies will get access both to potential customers who welcome their pitches and to details about the exact products and services those people are seeking. In theory, the data vault would earn money as a kind of authorization supervisor, managing the permissions that marketers would need to access information about Reputation.com’s clients.

To some, the idea seems a bit quixotic.

Reputation.com, with $67 million in venture capital, is not making a profit. Although the company’s “privacy” products, like removing clients’ personal information from list broker and marketing databases, are popular, its reputation management techniques can be controversial. For instance, it offers services meant to make negative commentary about individual or corporate clients less visible on the Web.

And there are other hurdles, like competition. A few companies, like Personal, have already introduced vault services. Also, a number of other enterprises have tried — and quickly failed — to sell consumers on data lockers.

Even so, Mr. Fertik contends Reputation.com has the answer. The company already has several hundred thousand paying customers, he says, and patents on software that can identify consumers’ information online and score their reputations. He intends to show clients their scores and advise them on how to improve them.

“You can’t just build a vault and wish that vendors cared enough about your data to pay for it,” Mr. Fertik says. “You have to build a business that gives you the lift to accumulate a data set and attract consumers, the science to create insights that are valuable to vendors, and the power to impose restrictions on the companies who consume your data.”

THE consumer data trade is large and largely unregulated.

Companies and organizations in the United States spend more than $2 billion a year on third-party data about individuals, according to a report last year on personal identity management from Forrester Research, a market research firm. They spend billions more on credit data, market research and customer data analytics, the report said.

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Doping at U.S. Tracks Affects Europe’s Taste for Horse Meat

PARIS — For decades, American horses, many of them retired or damaged racehorses, have been shipped to Canada and Mexico, where it is legal to slaughter horses, and then processed and sold for consumption in Europe and beyond.

Christinne Muschi for The New York Times

A slaughterhouse in Saint-André-Avellin, Quebec, where meat is processed for sale in Europe.

Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.

Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.

In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.

“We don’t want them,” he said. “It’s too risky.”

The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.

But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.

Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.

“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”

Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.

In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.

“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.

The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.

The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.

Because horses are not a traditional food source in the United States, the Food and Drug Administration does not require human food safety information as it considers what drugs can be used legally on horses. Patricia El-Hinnawy, a spokeswoman for the agency, said agency-approved drugs intended for use in horses carried the warning “Do not use in horses intended for human consumption.”

She also said the case against Mr. Andio remained open.

“On the warning letter, the case remains open and no further information can be provided at this time,” Ms. El-Hinnawy said.

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Doping at U.S. Tracks Affects Europe’s Taste for Horse Meat

PARIS — For decades, American horses, many of them retired or damaged racehorses, have been shipped to Canada and Mexico, where it is legal to slaughter horses, and then processed and sold for consumption in Europe and beyond.

Christinne Muschi for The New York Times

A slaughterhouse in Saint-André-Avellin, Quebec, where meat is processed for sale in Europe.

Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.

Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.

In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.

“We don’t want them,” he said. “It’s too risky.”

The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.

But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.

Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.

“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”

Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.

In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.

“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.

The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.

The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.

Because horses are not a traditional food source in the United States, the Food and Drug Administration does not require human food safety information as it considers what drugs can be used legally on horses. Patricia El-Hinnawy, a spokeswoman for the agency, said agency-approved drugs intended for use in horses carried the warning “Do not use in horses intended for human consumption.”

She also said the case against Mr. Andio remained open.

“On the warning letter, the case remains open and no further information can be provided at this time,” Ms. El-Hinnawy said.

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You for Sale: Company Envisions ‘Vaults’ for Personal Data

Peter DaSilva for The New York Times

Michael Fertik, the founder and chief executive of Reputation.com, at its offices in Redwood City, Calif., where he has amassed a database of information collected on millions of consumers.

“YOU are walking around naked on the Internet and you need some clothes,” says Michael Fertik. “I am going to sell you some.”

Naked? Not exactly, but close.

Mr. Fertik, 34, is the chief executive of Reputation.com, a company that helps people manage their online reputations. From his perch here in Silicon Valley, he views the digital screens in our lives, the smartphones and the tablets, the desktops and the laptops, as windows of a house. People go about their lives on the inside, he says, while dozens of marketing and analytics companies watch through the windows, sizing them up like peeping Toms.

By now many Americans are learning that they are living in a surveillance economy. “Information resellers,” also known as “data brokers,” have collected hundreds to thousands of details — what we buy, our race or ethnicity, our finances and health concerns, our Web activities and social networks — on almost every American adult. Other companies that specialize in ranking consumers use computer algorithms to covertly score Internet users, identifying some as “high-value” consumers worthy of receiving pitches for premium credit cards and other offers, while dismissing others as a waste of time and marketing money. Yet another type of company, called an ad-trading platform, profiles Internet users and auctions off online access to them to marketers in a practice called “real-time bidding.”

As these practices have come to light, several members of Congress, and federal agencies, have opened investigations.

At least for now, however, these companies typically do not permit consumers to see the records or marketing scores that have been compiled about them. And that is perfectly legal.

Now, Mr. Fertik, the loquacious, lion-maned founder of Reputation.com, says he has the free-market solution. He calls it a “data vault,” or “a bank for other people’s data.”

Here at Reputation.com’s headquarters, a vast open-plan office decorated with industrial-looking metal struts and reclaimed wood — a discreet homage to the lab where Thomas Edison invented the light bulb — his company has amassed a database on millions of consumers. Mr. Fertik plans to use it to sell people on the idea of taking control of their own marketing profiles. To succeed, he will have to persuade people that they must take charge of their digital personas.

Pointing out the potential hazards posed by data brokers and the like is part of Mr. Fertik’s M.O. Covert online profiling and scoring, he says, may unfairly exclude certain Internet users from marketing offers that could affect their financial, educational or health opportunities — a practice Mr. Fertik calls “Weblining.” He plans to market Reputation.com’s data vault, scheduled to open for business early next year, as an antidote.

“A data privacy vault,” he says, “is a way to control yourself as a person.”

Reputation.com is at the forefront of a nascent industry called “personal identity management.” The company’s business model for its vault service involves collecting data about consumers’ marketing preferences and giving them the option to share the information on a limited basis with certain companies in exchange for coupons, say, or status upgrades. In turn, participating companies will get access both to potential customers who welcome their pitches and to details about the exact products and services those people are seeking. In theory, the data vault would earn money as a kind of authorization supervisor, managing the permissions that marketers would need to access information about Reputation.com’s clients.

To some, the idea seems a bit quixotic.

Reputation.com, with $67 million in venture capital, is not making a profit. Although the company’s “privacy” products, like removing clients’ personal information from list broker and marketing databases, are popular, its reputation management techniques can be controversial. For instance, it offers services meant to make negative commentary about individual or corporate clients less visible on the Web.

And there are other hurdles, like competition. A few companies, like Personal, have already introduced vault services. Also, a number of other enterprises have tried — and quickly failed — to sell consumers on data lockers.

Even so, Mr. Fertik contends Reputation.com has the answer. The company already has several hundred thousand paying customers, he says, and patents on software that can identify consumers’ information online and score their reputations. He intends to show clients their scores and advise them on how to improve them.

“You can’t just build a vault and wish that vendors cared enough about your data to pay for it,” Mr. Fertik says. “You have to build a business that gives you the lift to accumulate a data set and attract consumers, the science to create insights that are valuable to vendors, and the power to impose restrictions on the companies who consume your data.”

THE consumer data trade is large and largely unregulated.

Companies and organizations in the United States spend more than $2 billion a year on third-party data about individuals, according to a report last year on personal identity management from Forrester Research, a market research firm. They spend billions more on credit data, market research and customer data analytics, the report said.

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Morsi Extends Compromise to Egyptian Opposition

Tara Todras-Whitehill for The New York Times

Protesters against President Mohamed Morsi next to a destroyed barricade near the presidential palace in Cairo on Saturday. More Photos »

CAIRO — Struggling to quell violent protests that have threatened to derail a referendum on an Islamist-backed draft constitution, President Mohamed Morsi of Egypt moved Saturday to appease his opponents with a package of concessions hours after state news media reported that he was moving toward imposing a form of martial law to secure the streets and allow the vote.

Mr. Morsi did not budge on a critical demand of the opposition: that he postpone the referendum set for next Saturday to allow a thorough overhaul of the proposed charter, which liberal groups say has inadequate protection of individual rights and provisions that could someday give Muslim religious authorities new influence.

But in a midnight news conference, his prime minister said Mr. Morsi was offering concessions that he had appeared to dismiss out of hand a few days before. The president rescinded most of his sweeping Nov. 22 decree that temporarily elevated his decisions above judicial review and drew tens of thousands of protesters into the streets calling for his downfall. He also offered a convoluted arrangement for the factions to negotiate constitutional amendments this week that would be added to the charter after the vote.

Taken together, the announcements, rolled out over a confusing day, appeared to indicate the president’s determination to do whatever it takes to get to the referendum, which his Islamist supporters say will lay the foundation of a new democracy and a return to stability.

Amid growing concerns among his advisers that the Interior Ministry might be unable to secure either the polls or the institutions of government in the face of renewed violent protests, the state media reported early Saturday that he would soon order the armed forces to keep order and authorize its solders to arrest civilians.

In recent days, mobs have attacked more than two dozen Muslim Brotherhood offices and ransacked the group’s headquarters, and more than seven people have died in street fighting between Islamists and their opponents.

As of early Sunday, Mr. Morsi had not yet formally issued an order calling out the military, raising the possibility that the announcement was intended as a warning to tell his opponents their protests would not derail the vote.

The moves on Saturday offered little hope of fully resolving the standoff, in part because opposition leaders had ruled out — even before his concessions were announced — any rushed attempt at a compromise just days before the referendum.

“No mind would accept dialogue at gunpoint,” said Mohamed Abu El Ghar, an opposition leader, alluding to previously floated ideas about last-minute talks for constitutional amendments.

Nor did Mr. Morsi’s Islamist allies expect his proposals to succeed. Many said they had concluded that much of the secular opposition was primarily interested in obstructing the transition to democracy at all costs, to try to block the Islamists from winning elections. Instead, some of the president’s supporters privately relished the bind they believed Mr. Morsi had built for the opposition by giving in to some demands, forcing their secular opponents to admit they are afraid to take their case to the ballot box.

For now, the military appears to back Mr. Morsi. Soon after the state newspaper Al Ahram suggested the president would impose martial law, a military spokesman read a statement over state television that echoed Mr. Morsi’s own speeches.

The military “realizes its national responsibility for maintaining the supreme interests of the nation and securing and protecting the vital targets, public institutions and the interests of the innocent citizens,” the spokesman said, warning of “divisions that threaten the State of Egypt.”

“Dialogue is the best and sole way to reach consensus that achieves the interests of the nation and the citizens,” he added. “Anything other than that puts us in a dark tunnel with drastic consequences, which is something that we will not allow.”

If Mr. Morsi goes through with the plan, it would represent a historic role reversal. For six decades, Egypt’s military-backed authoritarian presidents used martial law to hold on to power and to jail Islamists like Mr. Morsi, a former leader of the Muslim Brotherhood. It would also come just four months after he managed to pry power out of the hands of the country’s top generals, who had seized control when Hosni Mubarak was ousted last year and then held on to it for three months after Mr. Morsi’s election.

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