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NSA Leak Could Be Bad Business For U.S. Tech Companies

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NSA Leak Could Be Bad Business For U.S. Tech Companies

The Industry

NSA Leak Could Be Bad Business For U.S. Tech Companies

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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.


And I'm Robert Siegel. At the White House today, President Obama met with a group that will advise him on whether the government is respecting Americans' right to privacy. It's the Privacy and Civil Liberties Oversight Board, an independent agency. The board was established in 2004, but is just now getting down to work. A central task: considering how to balance the protection of civil liberties with the need to ensure security.

BLOCK: Some private tech companies find themselves caught up in that balancing act. U.S. officials say that in order to fight terrorism, the government needs to be able to gather and analyze some personal data. And as we've learned in the last two weeks, this data collection requires tech companies to collaborate with the government in previously undisclosed ways. NPR's Tom Gjelten has this story about what that means for the companies involved.

TOM GJELTEN, BYLINE: Two years ago, the World Economic Forum said personal data is the new oil, a new resource for wealth creation. Information on who we talk to, when and how, where we go, what we spend money on - all that can help analysts understand and even predict our behavior. That presents huge business opportunities for companies like Google and Facebook, but all those data are also worth a fortune to intelligence and security agencies.

So the companies that gather personal data almost inevitably get pulled into the surveillance business. It's not something they can be especially happy about, as Jason Healey - of the Atlantic Council - points out.

JASON HEALEY: U.S. tech companies have been compelled by the U.S. government, under court order, to do things that really aren't in their shareholders' interests or in their customers' interests.

GJELTEN: As recent revelations have made clear, these companies are forced to turn over to the government some of the personal data they've gathered during the course of doing business. The repercussions are still being played out. Malcolm Crompton(ph), a former privacy commissioner in Australia, says, for example, that when the U.S. establishes rules for Internet communications, they're felt around the world.

MALCOLM CROMPTON: An overwhelming proportion of Internet activity is still conducted through America or with American businesses. So the impact of American transparency and accountability processes is disproportionately large.

GJELTEN: In part because of the recent NSA revelations, the United States is now developing an international reputation for infringing on privacy. And the more concerns are raised about what is happening in the United States, the more other governments and tech companies in other countries are likely to see a downside to doing business here. Jason Healey directs the Cyber Statecraft Initiative at the Atlantic Council.

HEALEY: It wouldn't surprise me - it would be very rational - for foreign companies or individuals to just decide to try and avoid American cyberspace, where they can.

GJELTEN: Passing laws, for example, that their citizens' data can't be stored in the United States. American tech companies would be big losers.

HEALEY: For example, already in China, you see they don't use Twitter. They don't use Facebook and other products. They've got local equivalents.

GJELTEN: Richard Steenan(ph), an industry analyst focusing on tech companies, started a recent blog with these words: "The dream is over." U.S. tech, he said, is facing a crisis of confidence. The controversy over collusion between the NSA and U.S. companies like Google, Facebook and Microsoft could also have consequences here in the United States.

Many of these companies work voluntarily with the government in a joint effort to counter cyberattacks. They're considered, quote, "trusted partners." A question now is whether it becomes more awkward for them to cooperate in that way.

Tom Gjelten, NPR News, Washington.

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