Study: Surveillance will cost US tech sector more than $35B by 2016

A new study says that the U.S. tech industry is likely to lose more than $35 billion from foreign customers by 2016 because of concerns over government surveillance.

“In short, foreign customers are shunning U.S. companies,” the authors of a new study from the Information Technology and Innovation Foundation write.

{mosads}“The U.S. government’s failure to reform many of the NSA’s surveillance programs has damaged the competitiveness of the U.S. tech sector and cost it a portion of the global market share,” they said.

The think tank’s report found that the cost to the tech sector associated with ongoing concerns over surveillance programs run out of the U.S. was likely to “far exceed” $35 billion by 2016, an earlier estimate set by the group.

The group said that lawmakers must enact additional reforms to surveillance policy if they wish to help the tech sector regain the trust of foreign customers. That includes opposing “backdoors,” which allow law enforcement to access otherwise encrypted data, and signing off on trade agreements, including the controversial Trans-Pacific Partnership, that “ban digital protectionism.”

The study’s authors found that the revelations about broad U.S. surveillance programs acted as a justification for foreign policymakers to enact protectionist policies aimed at aiding their own domestic technology sectors.

Foreign companies have also used the information about U.S. surveillance programs to their advantage.

“Some European companies have begun to highlight where their digital services are hosted as an alternative to U.S. companies,” the authors write.

American companies, they found, have lost contracts to foreign competitors over fears about mass surveillance.

Earlier this month, President Obama signed the USA Freedom Act, a bill that reformed the three Patriot Act provisions that authorized the bulk, warrantless collection of Americans’ phone records. The bill was widely supported by technology companies, including giants like Apple and Google.