My memory is that he refused to stop it. Merkel has been telling him that allies don't spy on one another. O continues to support it.
The US spies just got caught at an unfortunate moment for O.
Oh well. Nonchalant shrug etc.
But it does damage to the US all the same. It isn't good news to be seen as a bad actor. Merkel is teaching him a lesson. She embarrassed him with exquisite timing to see if anything would have an effect.