Business-logic of cooperating with the NSA has changed

In an Atlantic editorial, Bruce Schneier discusses the post-Snowden business-climate. The NSA relied on Internet giants to do surveillance for them (surveillance being a major part of the Big Data business model), and pre-Snowden, there was no real downside to cooperating with illegal NSA spying requests -- in some cases, spooks would shower your company with money if it went along with the gag. Post-Snowden, all surveillance cooperation should be presumed to be destined to be made public, and that's changed the corporate calculus.

Pre-Snowden, there was no downside to cooperating with the NSA. If the NSA asked you for copies of all your Internet traffic, or to put backdoors into your security software, you could assume that your cooperation would forever remain secret. To be fair, not every corporation cooperated willingly. Some fought in court. But it seems that a lot of them, telcos and backbone providers especially, were happy to give the NSA unfettered access to everything. Post-Snowden, this is changing. Now that many companies' cooperation has become public, they're facing a PR backlash from customers and users who are upset that their data is flowing to the NSA. And this is costing those companies business.

How much is unclear. In July, right after the PRISM revelations, the Cloud Security Alliance reported that US cloud companies could lose $35 billion over the next three years, mostly due to losses of foreign sales. Surely that number has increased as outrage over NSA spying continues to build in Europe and elsewhere. There is no similar report for software sales, although I have attended private meetings where several large US software companies complained about the loss of foreign sales. On the hardware side, IBM is losing business in China. The US telecom companies are also suffering: AT&T is losing business worldwide.

This is the new reality. The rules of secrecy are different, and companies have to assume that their responses to NSA data demands will become public. This means there is now a significant cost to cooperating, and a corresponding benefit to fighting.

A Fraying of the Public/Private Surveillance Partnership [Bruce Schneier/Atlantic]

Notable Replies

  1. Interesting judo-throw of a comment there on that article.

  2. Could we have a case of 'doing-the-right-thing-for-the-wrong-reasons' in the making?
    Well, results are results.

  3. I've said it on a few other threads, but it bears repeating here (now that someone else has said it also). The NSA is doing more than any other single entity to undermine US dominance of the tech sector. Their decisions have been rooted in extreme hubris - characteristic of empires prior to the fall - assuming that their dominance cannot possibly change.

    Here they are trying to 'protect' US interests, and within a decade they may have done more economic damage than anyone else.

  4. pyalot says:

    Why of course!

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