Silicon Valley warns NSA surveillance poses threat to overseas growth

Tech companies are warning Washington that the National Security Agency (NSA) has become a threat to their business interests overseas. 

Several countries are considering moves to ban American tech companies in response to the revelations about U.S. surveillance, putting Silicon Valley’s expansion plans at risk.

In a campaign launched Monday, eight companies — Google, Facebook, Twitter, Microsoft, Apple, LinkedIn, Yahoo and AOL — demanded surveillance reforms so they can better protect their users’ data, regardless of where those users are located.

{mosads}“The ability of data to flow or be accessed across borders is essential to a robust 21st century global economy,” the tech companies said in one of their “principles” for surveillance reform. “Governments should permit the transfer of data and should not inhibit access by companies or individuals to lawfully available information that is stored outside of the country.”

Brazil and the member states of the European Union are considering rules that would keep out American tech companies that are believed to be the targets of NSA surveillance, including Google and Facebook.

Exclusion from other countries would deal a heavy blow to the companies’ bottom lines, according to Daniel Castro, senior analyst at the Information Technology and Innovation Foundation.

“That’s where the market is,” he said.

If just a few countries refuse to give American tech companies access, more countries could follow, creating a chain effect that could have devastating consequences for one of America’s boom industries.

Castro said American tech companies are caught between the U.S. government’s demands for user data and foreign countries’ demands for user protections.

“It’s a game of chicken between the countries, with the companies stuck in the middle.”

The blowback overseas is just the latest headache for the tech industry, which has been rocked by reports of widespread data collection by the NSA.

Tech companies are reliant on people’s willingness to share information online for advertising, and news that the data is being swept up by government agencies could put that business model at risk.

In a set of principles for NSA reform, the tech industry called on governments to allow companies to continue to collect data from their citizens and to “work together to resolve conflict” when the countries disagree over government access to user data.

The companies are encouraging governments “to develop better mechanisms for countries to get data from each other,” rather than keeping data from crossing country boundaries, said Leslie Harris, president of the Center for Democracy and Technology.

Harris said the companies’ repeated calls for more oversight and transparency for surveillance programs, and their push for an end to the kind of bulk collection in which the NSA has engaged, would also help them internationally.

The companies “called for a global standard that applies everywhere,” she said.

Foreign citizens would have the same protections as Americans, she said. “That’s enormous.”

Rep. James Sensenbrenner Jr. (R-Wis.) — who introduced the surveillance-limiting USA Freedom Act earlier this year with Sen. Patrick Leahy (D-Vt.) — said his bill would help American tech companies build trust overseas.

“U.S. companies have said the NSA revelations have crippled their businesses in Europe,” Sensenbrenner said in a statement.  

“The USA Freedom Act ends the NSA’s bulk collection programs, both at home and abroad, and forces the intelligence agencies to focus their resources on actual leads.”

Sensenbrenner’s bill, which has been broadly endorsed by the tech industry, would also require the U.S. government to publish information about its surveillance and permit companies to publish information about the government requests they receive.

 The legislation would give “Internet and telecom companies the ability to publicly disclose the number of FISA [Foreign Intelligence Surveillance Act] orders and national security letters they received, as well as how many orders they complied with,” Sensenbrenner said. 

“It also allows companies to divulge how many users or accounts on whom information was demanded under the FISA orders and national security letters.”

Castro said internationally focused legislation would come after Congress deals with the domestic implications of the NSA surveillance.

“There are people on the Hill who are thinking about this,” he said.

It might take foreign countries passing exclusionary laws “before the U.S. government wakes up” and passes reform that would keep American tech companies competitive abroad, he said.

Harris said it would take time to turn Congress’s attention toward the privacy concerns of citizens of other countries.

“I hope that we get there, but I think, right now, the Hill is totally focused on the rights of Americans,” she said.