Tech companies say NSA spying harms competitiveness

Erin Kelly | USA TODAY

WASHINGTON — U.S. tech companies warn that their ability to compete globally is being destroyed by government snooping and the mistrust it is creating worldwide, and they will join with a powerful senator Wednesday to push Congress for help.

"Customers around the world are raising more questions and expressing serious concern about the security of their data," Brad Smith, general counsel and executive vice president for Microsoft Corp., said in an interview with USA TODAY. "I see this myself in trips to Europe and in a trip just last week to Asia. People have more qualms about whether their personal information really is private and beyond the reach of government."

Smith is scheduled to participate in a roundtable discussion of the issue in Silicon Valley on Wednesday led by Senate Finance Committee Chairman Ron Wyden, D-Ore. Representatives of Google, Facebook, Dropbox and Greylock Partners venture capital firm also will speak.

The tech companies say that European and Canadian companies are using revelations about the National Security Agency's mass surveillance of phone records to gain a competitive advantage against American firms overseas. Foreign competitors tell potential customers that American phone and Internet companies may be forced to turn over consumers' private data to the U.S. government.

The erosion of trust in the privacy of American technology is an especially big threat to companies such as Dropbox, which has 70% of its users overseas.

Wyden said Congress must act to rein in the NSA or risk losing high-paying American jobs in the tech industry. A report by the Information Technology and Innovation Foundation said U.S. tech companies stand to lose up to $35 billion through 2016 from canceled contracts and missed opportunities.

In June, the German government announced it would cancel a contract with Verizon Communications because of the NSA's bulk collection of millions of phone records. The mass surveillance, which is still going on, came to light last year when former NSA contractor Edward Snowden leaked the information.

"There are serious concerns about the implications for the whole U.S. technology sector," said Wyden, who also serves on the Senate Select Committee on Intelligence. "You've got consumers all over the world raising questions about the security of products that are made in the United States."

Smith said Microsoft and other U.S. tech companies are strengthening their data encryption to protect the privacy of their customers' e-mail, phone calls, and other information.

But FBI Director James Comey and Attorney General Eric Holder have come out against the U.S. tech industry's encryption efforts, saying that they will hinder law enforcement's ability to search electronic data to catch criminals and terrorists.

"What concerns me about this is companies marketing something expressly to allow people to place themselves beyond the law," Comey told reporters in September.

The tech companies say that the police can still get information about suspects in specific cases and don't need mass surveillance. If foreign countries go ahead with plans to require data to be stored locally, not in the United States, it will lock out U.S. law enforcement as well as U.S. companies, Smith said.

"If that happens, U.S. law enforcement isn't going to be able to reach that data through any kind of legal process," Smith said. "If the tech industry and law enforcement engage in a tug of war, it won't necessarily get the best result for the American people."

The tech industry is pushing for passage of the USA Freedom Act, a bipartisan bill that Senate Judiciary Committee Patrick Leahy, D-Vt., is hoping to bring to a vote when Congress returns after the Nov. 4 election. The bill would stop the NSA's bulk collection of phone records.

Wyden recently introduced a separate, bipartisan bill that would boost the watchdog power of the Privacy and Civil Liberties Oversight Board to ensure that government surveillance efforts do not violate the privacy of law-abiding Americans.

"We want to try to ensure that there is more vigorous oversight so that both privacy and security are protected," Wyden said.



































