U.S. technology companies may lose as much as $35 billion in the next three years from foreign customers choosing not to buy their products over concern they cooperate with spy programs.

U.S. technology companies are in danger of losing more business to foreign competitors if the National Security Agencys power to spy on customers isnt curbed, researchers with the New America Foundation said in a report today.

The report, by the foundations Open Technology Institute, called for prohibiting the NSA from collecting data in bulk, while letting companies report more details about what information they give the government. Senate legislation introduced today would fulfill some recommendations by the institute, a Washington-based advocacy group that has been critical of NSA programs.

Citing concerns from top executives of Microsoft Corp. (MSFT), Cisco Systems Inc. (CSCO) and other companies, the report made a case that NSA spying could damage the $150 billion industry for cloud computing services. Those services are expanding rapidly as businesses move software and data to remote servers.

The immediate pain point is lost sales and business challenges, said Chris Hopfensperger, policy director for BSA/The Software Alliance, a Washington-based trade association that represents companies including Apple Inc. and Oracle Corp.

Microsoft is hearing from customers that they care more than ever about where their content is stored and how it is used and secured, said John Frank, deputy general counsel for the Redmond, Washington-based software maker.

A protester wearing a Guy Fawkes mask holds up a placard during a demonstration to mark the global "The Day We Fight Back" protest against mass surveillance outside the Supreme Court in Manila, Philippines. Close

A protester wearing a Guy Fawkes mask holds up a placard during a demonstration to mark... Read More

Close

A protester wearing a Guy Fawkes mask holds up a placard during a demonstration to mark the global "The Day We Fight Back" protest against mass surveillance outside the Supreme Court in Manila, Philippines.

More here:
Tech Companies Reel as NSA's Spying Tarnishes Reputations ...

Every action has a consequence, and so does the NSAs mass surveillance efforts that dont seem to care about peoples innocence or need for privacy. In fact, a new study shows that there are large financial consequences to this type of activities.

Our findings indicate that the NSAs actions have already begun to, and will continue to, cause significant damage to the interests of the United States and the global Internet community, the study reads.

The Open Technology Institute has chosen to look into the effects the scandal has had in several areas. For instance, the NSA disclosures are affecting American companies by damaging their sales overseas and diminishing their business opportunities. This happens especially as foreign companies turn products that can protect users from the NSAs ever-seeing eye into advantages against competitors.

The cloud computing industry is particularly vulnerable and could lose billions of dollars in the next three to five years as a result of NSA surveillance, the study shows.

There are also potential costs to US businesses and to the openness of the Internet from the rise of data localization and data protection proposals from governments looking to fortify themselves against the NSA. Basically, the proposal to create local networks instead of relying on the worldwide Internet network is worrying because they can threaten free expression and privacy if they are implemented.

There are also some rather big costs to the United States foreign policy because the country has lost some of its credibility, especially for the Internet Freedom agenda set down by the government. Damages are also caused to broader bilateral and multilateral relations due to the fact that the NSA spies on all countries in the world, regardless if these are the United States strategic partners or not.

For instance, theres been an obvious strain between the United States and countries such as Germany and Brazil in the past year.

Perhaps the heaviest cost, however, is the one the scandal has had on cybersecurity. The NSA has done serious damage to Internet security through its weakening of key encryption standards, insertion of surveillance backdoors into widely-used hardware and software products, stockpiling rather than responsibly disclosing information about software security vulnerabilities, and a variety of offensive hacking operations undermining the overall security of the global Internet, the studys authors wrote.

While the United States government has started to take some steps to mitigate the damage and start rebuilding the trust in the countrys ability to be a responsible steward of the Internet, things are going slow because the reforms promised last year are yet to be delivered and the changes that were actually announced would have minimal impact on the NSAs powers.

See the rest here:
NSA Spying Activities Have Costly Impact on Private Sector ...

US technology companies are in danger of losing more business to foreign competitors if the National Security Agency's power to spy on customers isn't curbed, the New America Foundation said in a report on Tuesday.

The foundation called for prohibiting the NSA from collecting data in bulk, while letting companies report more details about what information they provide the government. Legislation scheduled to be introduced on Tuesday in the Senate would fulfill some recommendations by the foundation, a Washington-based advocacy group that has been critical of NSA programmes.

Citing concerns from top executives of Microsoft Corp, Cisco Systems Inc. and other companies, the report made a case that NSA spying could damage the $150-billion industry for cloud computing services. Those services are expanding rapidly as businesses move software and data to remote servers.

"The immediate pain point is lost sales and business challenges," said Chris Hopfensperger, policy director for BSA/The Software Alliance, a Washington-based trade association that represents companies including Apple Inc and Oracle Corp.

Microsoft is hearing from customers "that they care more than ever about where their content is stored and how it is used and secured," said John Frank, deputy general counsel for the Redmond, Washington-based software maker.

The company hasn't seen a significant business impact yet, Jack Evans, a Microsoft spokesman, said in an e-mail.

ServInt Corp, a Reston, Virginia-based company that provides website hosting services, has seen a 30 per cent decline in foreign customers since the NSA leaks began in June 2013, said Christian Dawson, its chief operating officer.

"It ends up being death by a thousand paper cuts," Dawson said in a phone interview.

Confidence in technology companies began to be tested a year ago when former NSA contractor Edward Snowden leaked documents that revealed a programme called Prism, under which the US compels companies through court orders to turn over data about their users. The documents also uncovered NSA hacking of fibre optic cables abroad to steal data, and the physical interception of routers, servers and other network equipment to install surveillance tools before they were shipped to users.

International cloud providers are now using the NSA revelations as a marketing tool, said Dawson, who also serves as chairman of the Internet Infrastructure Coalition, which represents Dell Inc, Rackspace Hosting Inc and other companies.

Read the rest here:
US tech companies reel as NSA spying tarnishes reputations

Photo: Name Withheld; Digital Manipulation: Jesse Lenz

There is no doubt the integrity of our communications and the privacy of our online activities have been the biggest casualty of the NSAs unfettered surveillance of our digital lives. But the ongoing revelations of government eavesdropping has had a profound impact on the economy, the security of the internet and the credibility of the U.S. governments leadership when it comes to online governance.

These are among the many serious costs and consequences the NSA and those who sanctioned its activitiesincluding the White House, the Justice Department and lawmakers like Sen. Dianne Feinsteinapparently have not considered, or acknowledged, according to a report by the New America Foundations Open Technology Institute.

Too often, we have discussed the National Security Agencys surveillance programs through the distorting lens of a simplistic security versus privacy narrative, said Danielle Kehl, policy analyst at the Open Technology Institute and primary author of the report. But if you look closer, the more accurate story is that in the name of security, were trading away not only privacy, but also the U.S. tech economy, internet openness, Americas foreign policy interests and cybersecurity.

Over the last year, documents leaked by NSA whistleblower Edward Snowden, have disclosed numerous NSA spy operations that have gone beyond what many considered acceptable surveillance activity. These included infecting the computers of network administrators working for a Belgian telecom in order to undermine the companys routers and siphon mobile traffic; working with companies to install backdoors in their products or network infrastructure or to devise ways to undermine encryption; intercepting products that U.S. companies send to customers overseas to install spy equipment in them before they reach customers.

The Foundations report, released today, outlines some of the collateral damage of NSA surveillance in several areas, including:

The economic costs of NSA surveillance can be difficult to gauge, given that it can be hard to know when the erosion of a companys business is due solely to anger over government spying. Sometimes, there is little more than anecdotal evidence to go on. But when the German government, for example, specifically cites NSA surveillance as the reason it canceled a lucrative network contract with Verizon, there is little doubt that U.S. spying policies are having a negative impact on business.

[T]he ties revealed between foreign intelligence agencies and firms in the wake of the U.S. National Security Agency (NSA) affair show that the German government needs a very high level of security for its critical networks, Germanys Interior Ministry said in a statement over the canceled contract.

Could the German government simply be leveraging the surveillance revelations to get a better contract or to put the US on the defensive in foreign policy negotiations? Sure. That may also be part of the agenda behind data localization proposals in Germany and elsewhere that would force telecoms and internet service providers to route and store the data of their citizens locally, rather than let it pass through the U.S.

But, as the report points out, the Germans have not been alone in making business decisions based on NSA spying. Brazil reportedly scuttled a $4.5 billion fighter jet contract with Boeing and gave it to Saab instead. Sources told Bloomberg News [t]he NSA problem ruined it for the US defense contractor.

Go here to see the original:
Personal Privacy Is Only One of the Costs of NSA Surveillance