The NSA's Overreach And Lack Of Transparency Is Hurting American Businesses

from the the-economy-has-been-drafted-into-the-War-of-Terror dept

Wed, Jul 31st 2013 8:51am — Tim Cushing

One major negative side effect of the NSA leaks is the problem it's causing for US-based tech companies. Not only have they been forbidden to discuss the details and scope of their interactions with American intelligence agencies, they've also been put in the worst possible light by some of the revelations.

Very simply put, the actions of the NSA harm American businesses. The NSA's control of the narrative only makes it worse as existing and potential customers have no way of knowing the full extent of the protection (or lack thereof) surrounding their data. Under the current law, companies can't even acknowledge they've received FISA court orders, much less provide statistics on frequency and compliance. With these restrictions in place, the government becomes the mouthpiece for American tech companies, and that mouth isn't saying much.

Pointing to the potential fallout from the disclosures about the scale of NSA operations in Europe, [Neelie] Kroes, the European commissioner for digital matters, predicted that US internet providers of cloud services could suffer major business losses.

"If businesses or governments think they might be spied on, they will have less reason to trust cloud, and it will be cloud providers who ultimately miss out. Why would you pay someone else to hold your commercial or other secrets if you suspect or know they are being shared against your wishes?" she said.

"It is often American providers that will miss out, because they are often the leaders in cloud services. If European cloud customers cannot trust the United States government, then maybe they won't trust US cloud providers either. If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now."

As it stands right now, hardly anyone trusts the American government. Those who are loudest in their defense of these programs also stand to gain the most by their continued existence. And while a lot of the discussion centers around the constitutional issues of harvesting of data on American citizens, the rest of the world isn't exactly thrilled either, especially considering these rights (even if ignored domestically) aren't extended to foreigners.

As far as anyone can tell, it's open season on foreign data and hardly anyone is showing any interest in rolling that back. If a foreign company suspects the NSA might want to sift through its data, why would it make it easier by using US-based companies to store its info or handle its traffic?

For foreigners who don't regularly read American surveillance statutes, this all came as an unpleasant surprise. And the details of how the NSA administers the mass surveillance programs do not make the surprise any more palatable. Individuals subject to NSA surveillance are almost never notified. The proceedings authorizing the surveillance are secret. The orders and directives are classified. The Internet companies that respond to the U.S. government's information demands are under gag order, or otherwise obligated not to disclose. And from a foreigner's perspective, all this happens at the request of a government they can't hold to account and is approved by a secret foreign court they can't petition.

In addition to its broad legal authority to spy on foreigners, the U.S. now has a distinct technological advantage in doing so. In the past, the nature of the telecommunications infrastructure meant that NSA commonly had to operate abroad to intercept in real-time phone calls between non-Americans. But today, most communications flow over the Internet and a very large percentage of key Internet infrastructure is in the United States. Thus, foreigners' communications are much more likely to pass through U.S. facilities even when no U.S. person is a party to a particular message. Think about a foreigner using Gmail, or Facebook, or Twitter -- billions of these communications originate elsewhere in the world but pass through, and are stored on, servers located in the U.S.

Because of this, US companies are now viewed as "security risks." The lack of any avenue for recourse makes the use of US services even less palatable. American companies wishing to do business with foreign companies may find themselves having to set up local servers in other countries, or risk losing that business altogether. The surveillance net cast by the NSA (and others) shows no sign of being pulled back soon, if ever. If attempts at transparency on government requests continue to be rebuffed by the administration, the deleterious side effects of these spy programs will be permanent.

So the first unintended consequence of mass NSA surveillance may be to diminish the power and profitability of the U.S. Internet economy. America invented the Internet, and our Internet companies are dominant around the world. The U.S. government, in its rush to spy on everybody, may end up killing our most productive golden goose.

A recent survey by the Cloud Computing Alliance bears this out. When asked if the "Snowden incident" would make them less likely to use a US-based cloud service, 56% of respondents said, "yes," with an additional 10% indicating that they had already cancelled a project to use a US cloud service. 36% of respondents from American companies said the Snowden incident made it harder to do business outside of the US.

Also noted in the CSA's report is that a little transparency would go a long ways towards mitigating the fallout. When asked to rate their government's data harvesting processes (for security and law enforcement purposes), only 10% rated theirs as "excellent" in terms of understanding the process and having clear documentation. Nearly half (47%) rated theirs at the lowest rung: "Poor, there is no transparency in the process and I have no idea how often the government accesses my information."

Transparency would help, but so far, the administration and the agencies themselves have shown a reluctance (if not complete antagonism) towards revealing any of the inner workings, much less allowing affected companies to separate FISA requests from normal law enforcement activity. There's been some pushback from tech companies and rights groups, but for the most part, the NSA seems comfortable with conjuring up the specter of terrorism in order to fight off any requests for transparency.

With no openness and no effective limits on US surveillance efforts, US companies are going to continue paying the price for the government's lack of credibility.

Kroes warned that US firms could be the biggest losers from the US government's voracious appetite for information.

"Concerns about cloud security can easily push European policy-makers into putting security guarantees ahead of open markets, with consequences for American companies. Cloud has a lot of potential. But potential doesn't count for much in an atmosphere of distrust."

CSA Govt Access Survey July 2013 (PDF)CSA Govt Access Survey July 2013 (Text)

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Filed Under: harm, nsa, nsa surveillance, trust, us businesses

41 Comments

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Ninja (profile), 31 Jul 2013 @ 7:37am

That could be interesting. When money is involved changes tend to happen much faster. Nothing like a big financial hit to spark change. I wonder if Windows will take a blow huge enough to push Linux and other systems up. That would be awesome.
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Anonymous Coward, 31 Jul 2013 @ 8:59am

New leak
Revealed: NSA program collects 'nearly everything a user does on the internet'

http://www.theguardian.com/world/2013/jul/31/nsa-top-secret-program-online-data

This should have been released yesterday before the D.C. hearings began.
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Guardian, 31 Jul 2013 @ 9:05am

suck i tup buttercup
it aint gonna change and as more and more realzie that to do business with the united states of facism you will be spied on and what not...fewer and fewer will do so.

OBAMA blew it for all of you....
nancy pelosi too.
oh well glad i don't live in the usa....go look at detroit thats all your futures...and when 75% of your debt is owned by fellow americans guess what it means the rest of the world has little stack in you going bankrupt....

enjoy that concept...
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John Fenderson (profile), 31 Jul 2013 @ 9:08am

Not just foreign companies
US companies are now viewed as "security risks.

True, because they are security risks. I'm a US citizen -- the most group most "protected" from US spying, and it's clear that using US third party providers presents a real security threat to me. It's even worse for people who aren't US citizens.

I avoid using third party servers to the greatest extent that I can, and lately have started adding a new facet to this: I've been asking all companies I do business with that hold any data of mine or about me (not just internet ones) if they use the cloud in their own backend. If the answer is yes, I stop doing business with them. I've switched away from three companies because of this so far.
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out_of_the_blue, 31 Jul 2013 @ 9:08am

But The Rich not only don't CARE...
This is yet again built on totally wrong premise that the gov't and The Rich who own the gov't are essentially good and builders, when they're NOT. The Rich are simply the most successful of thieves, and increasingly savage as they shed all limits. Their goal now is to bring down the United States, saddle the populace with unpayable "debt" of paper money then implement "austerity" and starve the populace while the bankers loot the economy as in Greece, and not least by waging unpopular and totally phony wars make it reviled by rest of the world, and in process neutralize the biggest opposition to global tyranny. So NSA effect is desired. And so far the plan is working well.

@ "Ninja": even Linux won't help.
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TasMot (profile), 31 Jul 2013 @ 9:11am

Yeah, because the US can't get to the servers elsewhere
ooops, forgot that they just took all of the MegaUpload servers ('course then they just threw away everybodys data).
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John Fenderson (profile), 31 Jul 2013 @ 9:19am

Re: But The Rich not only don't CARE...
This is yet again built on totally wrong premise that the gov't and The Rich who own the gov't are essentially good and builders

It is? Please explain, as I don't see it.
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Anonymous Coward, 31 Jul 2013 @ 9:25am

foreigners likely actually DO have rights under the constitution
"And while a lot of the discussion centers around the constitutional issues of harvesting of data on American citizens, the rest of the world isn't exactly thrilled either, especially considering these rights (even if ignored domestically) aren't extended to foreigners.

As far as anyone can tell, it's open season on foreign data and hardly anyone is showing any interest in rolling that back."

Yes, this is definitely true. Reading foreign news sites, having US politicians claim we don't do any of that spying stuff on Americans just makes the scandal look even worse in the rest of the world. They take US politicians saying that to meaning "everyone in foreign countries has no rights".

What's even worse here, is that the insistence that foreigners have no rights under the constitution is likely WRONG.

Do you think the founding fathers would have really been ok if the government did stuff like arresting foreigners visiting the country for criticizing the government? Or that they'd be perfectly fine with the government violating the freedom of the press for all foreign owned presses? Or that they'd be okay with locking up foreigners they don't like indefinitely without ever charging them with any crime, all while torturing the foreigners in prison?

Claiming that foreigners don't have civil rights was an invention of military hawks post-9/11 to let them get away with a lot of blatantly illegal things they did in the name of fighting terrorism.

And for anyone who disagrees and thinks foreigners don't have any rights under the bill of rights, show me the line that says the Bill of Rights only applies to US citizens.
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Machin Shin (profile), 31 Jul 2013 @ 9:26am

I really think it is time for the tech companies to get together and just stare down the government.

What would happen if they all agreed that on a certain day they would publish all the data requests along with nice page saying just what and how much data was shared?

I somehow don't see the government really doing much if they all stand together. Once the public saw the full story I'm sure it would be very hard for those in power to lash out at US companies.
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Anonymous Coward, 31 Jul 2013 @ 9:33am

Re: But The Rich not only don't CARE...
"This is yet again built on totally wrong premise that the gov't and The Rich who own the gov't are essentially good and builders, when they're NOT. The Rich are simply the most successful of thieves, and increasingly savage as they shed all limits. Their goal now is to bring down the United States"

Oh, I promise you, you will never forget you said that!
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awbMaven (profile), 31 Jul 2013 @ 9:34am

Give up on American services
As far as is reasonably possible, people of the world should stop using American services until Americans have sorted out their government.

Easier said than done, but a partial boycott of American goods & services is better than no boycott.
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R.H. (profile), 31 Jul 2013 @ 9:42am

Re: Yeah, because the US can't get to the servers elsewhere
If I remember correctly, MegaUpload's servers were in the United States. The problem was that Kim Dotcom wasn't in the US to be prosecuted and has a government/judiciary that, eventually, decided to stand up for its citizens against pressure from the US to extradite him.
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Ij The Blue, 31 Jul 2013 @ 9:55am

Re: But The Rich not only don't CARE...
Typical out of the blue incoherent babbling to attention. Yawn
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Machin Shin (profile), 31 Jul 2013 @ 9:58am

Isn't history fun?
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it"

I think maybe it is time for those that are in government to sit down and study a little history. They obviously have lost sight of the core values this country was built on, and if they do not go back to those values.... I think the Declaration of Independence is quite clear on what happens next.
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Hephaestus (profile), 31 Jul 2013 @ 10:05am

Re: New leak
Seems the DC hearings have been canceled

http://www.politico.com/blogs/media/2013/07/greenwald-nsa-surveillance-hearing-cancelled -169526.html

Seems Obama called the Democrats participating on the panel to a meeting ...
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Anonymous Coward, 31 Jul 2013 @ 10:15am

Re: Re: New leak
That's only Congress. Senate hearings have commenced...

http://www.theguardian.com/world/2013/jul/31/us-senate-intelligence-officials-nsa
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Hephaestus (profile), 31 Jul 2013 @ 10:16am

Interesting thing ....
The American internet companies are going to lose far more than the one or two billion US dollars that the defense companies made setting this system up. That in and of itself should be enough to push Google, facebook, twitter, Microsoft, etc to come at them really hard and fast.
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Anonymous Coward, 31 Jul 2013 @ 10:45am

Windows is already taking a blow with the 5% or so of market share of Windows 8 (compare that to the 40% or so share of windows xp).

Everybody should just ditch anything Microsoft, Apple, Facebook, Google and any other omnipresent tech company.
Let's see how they take that.
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Anonymous Coward, 31 Jul 2013 @ 10:54am

I'm a law-abiding American, and I'm even scared to use American tech. services, or even surf the internet without using Tor with java scripts and cookies disabled.

So I guess another sector loosing money from all this, is advertising companies and businesses that rely advertisement revenue.

The NSA might not be able to prove these programs stop any terrorist attacks, like the Boston Bombings, but there's ample proof these NSA programs are economy destroyers.
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Chris-Mouse (profile), 31 Jul 2013 @ 10:57am

Re: foreigners likely actually DO have rights under the constitution
Most of the United States Constitution doesn't even apply to US citizens, and never did. When you read the constitution, you find that it's really a list of things the government is required to do, along with a bunch of things the goverment is forbidden to do. For example, US citizens do not have the right to speak freely. Instead, the United States Government is forbidden to restrict what people may say. The only way this can be applied to only US citizens is if the United States considers everyone not a US citizen to be somehow not a person.

Then again, given how little the US military seems to care about the harm done to innocent civilians in the war on terror, maybe the government does see non US citizens as subhuman.
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Ninja (profile), 31 Jul 2013 @ 11:05am

Re:
Civil disobedience. Seems like a good idea. As much as these companies are in bed with the Govt it will produce financial losses in the long term. Besides, wasn't the US Govt on the verge of an economic colapse a while back when Obama had a hard time to re-roll the debts?
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John Fenderson (profile), 31 Jul 2013 @ 11:20am

Re: Re: Re: New leak
The Senate is part of Congress.
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McCrea (profile), 31 Jul 2013 @ 11:37am

Yeah, but not so much?
I think the premise is obvious and I agree with the theory.

However, I think we will not so greatly see any effect because 95% don't know / don't care.

tl;dr -- see what I mean?
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Anonymous Coward, 31 Jul 2013 @ 11:45am

Maybe 95% of American's don't know or care, but I'm sure the rest of the world knows and cares.

Despite popular opinion, America does not have a larger population than the rest of the world, combined.
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Anonymous Coward, 31 Jul 2013 @ 12:18pm

Re: Isn't history fun?
Today, Thomas Jefferson would be locked up for writing that.
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Anonymous Coward, 31 Jul 2013 @ 12:47pm

Re: Re: Isn't history fun?
Well of course! Thoughts of abolishing a government? Terrorist!!!!
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Uriel-238 (profile), 31 Jul 2013 @ 12:59pm

This is the world we live in...
Internet Zen Master, I think, nailed it. And I've been wary about when things are claimed like over 300 terrorists have been captured...

Not just because we are forced to take their word for it (or not)...

Not just because we're not sure those terrorists could have been detected by other means...

But because we're legendary for disappearing and torturing innocent people because of some quantum of similarity between them an persons of interest.

As far as we know over 300 terrorists detained are all innocent Americans now in some Egyptian black site getting electrocuted and waterboarded without due process, and will be held, or executed since their resurfacing will be an embarrassment to US Government interests.
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Machin Shin (profile), 31 Jul 2013 @ 1:14pm

Re: Re: Isn't history fun?
Well.... I am pretty sure the King would have liked to have locked him up back then.
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McCrea (profile), 31 Jul 2013 @ 1:51pm

Re:
Well, if you think the rest of the world has more power to change the American agendas than the American people do...

then I hope you're right. Get a move on it.
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Anonymous Coward, 31 Jul 2013 @ 2:23pm

Re: Re: Re: Re: New leak
Oh no a typo! So hard to understand with a simple typo. It's like the worst hangover imaginable when there is a typo on the internet!
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Eponymous Coward, 31 Jul 2013 @ 2:44pm

When push comes to shove...
I'm wondering when, or if, a company with enough clout and capital on hand, say Google or Apple, decides they had enough of this and refuses to further help in these programs what will happen? I question whether or not the NSA and the administration are ready to push back against a company if they stand up and basically say: "Fuck you, no more data! Take us to court if you think you have legal standing to do this." I'm not implying the government wouldn't take them to court, but whether they're really ready for a well prepared legal battle over these issues. It seems to me they're getting by on very weak arguments so far that wouldn't hold up in a legal setting, enough that is to compel a company to comply. That, and the public opinion fallout would be very detrimental to the administration's plans I would think. Though I'm not a lawyer, so anyone else have any thoughts on this possibility?
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Anonymous Coward, 31 Jul 2013 @ 3:00pm

Re:
Linux is still too obscure and besides, most computers still come with OEM Windows installed, meaning the change would have to come from distributers, which is less likely.

Besides: The problem of surveillance is primarily related to net-activity and while intentional security holes in Windows may exist, it is not a primary concern.
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Anonymous Coward, 31 Jul 2013 @ 3:07pm

Re: Re: Yeah, because the US can't get to the servers elsewhere
Politics didn't matter. It was simply impossible to legally extradite him as long as USA would not reveal "the evidence". If he had been extradited, all hell would have broken loose in kiwi-land...
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John Fenderson (profile), 31 Jul 2013 @ 3:10pm

Re: Re: Re: Re: Re: New leak
I know, right? I just singlehandedly saved the internet! You're welcome. :)
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Dan, 31 Jul 2013 @ 4:22pm

Alternatives?
Ever since the Snowden leaks, I've been hearing grumblings from Europeans about ditching US services. But what are the alternatives? I haven't seen any EU cloud providers that can replace US firms. If there was a golden opportunity to end American stranglehold on the cloud, it would be now, but the window is closing fast and no one's stepping on the plate. Unless you count the Pirate Bay crew.

I would like to wean off my American dependency, but with no real alternative, I would just have to accept the fact that, as a non-American, my entire online life is being collected by the US government.
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Anonymous Coward, 31 Jul 2013 @ 4:50pm

Re: Re:
To businesses it certainly matters that they pay money for their operating systems and get sold out. They make the classic arrogant corporate mistake of forgetting who your customers are, your true boss.
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Anonymous Coward, 1 Aug 2013 @ 3:31am

Re: foreigners likely actually DO have rights under the constitution
The one issue I remember a court ruling about whether or not non-citizens can be banned from making campaign contributions.

I can understand that that might be something you don't want, but since it was framed in the context of 'a donation is free speech', they chose to prevent it by ruling that the bill of rights doesn't apply to non-citizens.

While there are 2 (!) major flaws in this (1. If you acknowledge that unrestricted contributions can be bad, why allow them even for citizens and companies? 2. The premise 'donation is free speech' is wrong. It is not a statement it is an action. anyhew.), but there you have it.

If you take it together with the declaration of independence it's even more of a twisted interpretation, since there it is stated that Men (as in people) are created equal and with certain unalienable rights. And that is, according to the disagreeing parties here, is apparently not the case.

So really, those people that claim that everything goes for non-citizens, should really go and pledge allegiance to the Queen again.
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Anonymous Coward, 1 Aug 2013 @ 6:16am

Re: Re: Re: Isn't history fun?
"The difference between treason and patriotism is only a matter of dates."
- Alexandre Dumas, The Count of Monte Cristo
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Mike-2 Alpha (profile), 1 Aug 2013 @ 7:48am

Re: Re: Isn't history fun?
He sure would. 18 USC 2385 - Advocating Overthrow of Government. It was passed as part of the Alien Registration Act of 1940, and carries a penalty of a fine and / or up to 20 years in prison.

It's part of a regrettable episode in history where, fearing the end of the American way of life, certain laws were passed. As a result of these ill-conceived laws, the American way of life was injured and remained so until the people and their representatives came to their senses.

Why does that sound familiar?
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Cloudsplitter, 2 Aug 2013 @ 12:00am

Re: Yeah, because the US can't get to the servers elsewhere
The Mega servers were in the USA, and they stole their assets too, this is going to be another hit. Storing data on US based servers, can lead to disaster, as in the Mega case. US spying is going to toast a good part of the US computer industry.
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Cloudsplitter, 2 Aug 2013 @ 12:32am

Re: Alternatives?
What data is so important that you need to put it in an American cloud service, to be spied upon by the NSA. The other shoe that hasn't dropped yet, is who got the benefit, of the trillions of dollars of economic, and company secrets the NSA has stolen from around the world in the years it has been in operation. To say that various groups in the ruling elite, did not get a heads up on lucrative business opportunities, or processes, beggars the imagination. This never has been about terrorism or communism for that matter.
,
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