In July, I wrote a blog post quoting a CSA (Cloud Security Alliance) survey which found that 10% of 207 officials at non-US companies have canceled contracts with US service providers following the revelation of the NSA spy program in June.
Ten percent off the top? That was July. Back then, NSA whistleblower Edward Snowden promised further revelations on the US spy-agency's activities.
Now? As the Washington Post put it in a recent article: "Every week seems to bring another revelation about the National Security Agency's global panopticon. And each disclosure makes it harder to extend the agency the kind of trust and latitude that good intelligence work requires."
How bad is it?
The Washington Post is being kind. Accusations of NSA-spying have piled up hard, fast, and violent--like successive car crashes. It appears the three-letter-agency was tapping German Chancellor Angela Merkel's mobile phone...since 2002. Germans are so furious that some politicians have suggested that Europe's most prosperous country offer asylum to Edward Snowden.
But the latest accusation is catalytic. Documents provided to the Washington Post by Snowden claim the NSA infiltrated the overseas cloud networks through which Yahoo and Google move their petabytes of data, which includes users' e-mail.
"The NSA's snooping has infuriated US allies, and it may complicate trade negotiations with the European Union, wrote the Post. "US technology companies shouldn't be surprised if their products become less popular abroad with foreign customers fearful of surveillance, or if they're subject to far more stringent privacy regulations overseas. Foreign governments may also start requiring companies to store data collected about their citizens locally or taking other protectionist steps for which the NSA revelations provide convenient cover."
Loss of tech prowess
The USA has prided itself on its technological prowess--with good reason. Hotbeds like Stanford University (located in Silicon Valley) created services like Google. Apple in Cupertino makes consumer electronic devices that are the envy of the world. On the enterprise side, take your pick of large tech firms boosting the US economy and providing jobs--often to non-US citizens educated at US universities like Stanford who have proven their mettle (and often, become US citizens).
In a century where the USA must compete globally, the country has let a governmental agency intrude on the privacy of its own citizens and the world's citizens. And now US tech businesses are in the spotlight for all the wrong reasons.
This loss of the moral high ground is onerous. "Cybersecurity, where the US has singular expertise, is just the start. The State Department's efforts to promote freedom online will be harder to take seriously," wrote the Post. "Repressive countries seeking to tighten their control over Internet governance will be emboldened."
No one's talked about the "Arab Spring" for awhile--when activists using the Net helped overthrow regimes in northern Africa. Given the latest revelations, it's hard to imagine a US State Department spokesperson praising such actions with a straight face.
Google's CEO flips his wig
Back in July, I wrote about the "Safe Harbor Framework" between the US and Europe, which is intended to promote export US technological services. "[It was] launched in October 1998 [and] has always been at odds with the US Patriot Act, a piece of post-9/11 legislation that EU countries dislike--to the detriment of US business abroad," I wrote. "Now that it's clear that the NSA isn't concerned with EU standards of data privacy, Europeans are alarmed."
If they were alarmed in July, imagine how they feel now. And one non-European who's gone ballistic on this dodgy spying is Eric Schmidt, executive chairman of Google. In Hong Kong this week, Schmidt praised the HKSAR's "natively entrepreneurial" culture and ripped into the NSA.
"It's really outrageous that the National Security Agency was looking between the Google data centers, if that's true," Schmidt told The Wall Street Journal in an interview. "The steps that the organization was willing to do without good judgment to pursue its mission and potentially violate people's privacy, it's not OK."
Schmidt is correct: Hong Kongers have a natively entrepreneurial culture. And we also have the privacy commission and the PDPO. This makes the HKSAR a good place for datacenters, startups and technology-oriented businesses.
And he's equally correct when he spoke about the NSA's malfeasance: it's not OK.