A New Twist in International Relations: The Corporate
Keep-My-Data-Out-of-the-U.S. Clause
By Jordan Robertson
Dec 24, 2013 3:45 AM PT
By now, we've heard from tech companies such as Facebook,
Google and Cisco Systems that the National Security Agency's spying poses a
threat to their international business and, in Cisco's case, is already hurting
it. So what does that threat look like, exactly, at ground level?
Some companies are apparently so concerned about the NSA
snooping on their data that they're requiring - in writing - that their
technology suppliers store their data outside the U.S.
In Canada, a pharmaceutical company and government agency
have now both added language to that effect to their contracts with suppliers,
as did a grocery chain in the U.K., according to J.J. Thompson, chief executive
officer of Rook Consulting, an Indianapolis, Indiana-based security-consulting
firm. He declined to name the companies, which are using Rook to manage the
segmentation and keep the data out of the U.S.
Thompson said the language began appearing in contracts
over the past couple weeks, and could be an early indicator of things to come
as businesses adapt to a landscape altered by former NSA contractor Edward
Snowden's leaks. Documents leaked by Snowden indicate that the NSA has tapped
fiber-optic cables abroad, circumvented or cracked encryption and is massively
collecting telephone records and Internet traffic. Facebook, Google, Apple and
Yahoo were among 15 technology companies that asked President Barack Obama Dec.
17 to restrain the spy programs. Cisco said Nov. 13 that NSA spying has caused
delays to networking equipment orders.
U.S.-based technology companies face a serious threat.
The NSA disclosures may reduce U.S. technology sales overseas by as much as
$180 billion, or 25 percent of information technology services, by 2016,
according to Forrester Research Inc., a group in Cambridge, Massachusetts.
Some large tech firms have used the revelations as a
public relations opportunity, casting themselves as defenders of individual
privacy and a bulwark against government encroachment. The approach has
elicited accusations of hypocrisy from privacy advocates who say that many tech
companies are eroding privacy, as we reported Monday.
It's not all doom and gloom, however. Thompson's comments
show that some U.S. firms stand to benefit from distrust of the U.S.
government, and that a new model may be in the offing for protecting sensitive
data from the NSA's prying eyes.
There's a worry in this approach, though. Keeping the
data out of the U.S. makes intuitive sense, and limits the likelihood that U.S.
firms bound by U.S. laws will disclose it to the government. However, if the
scandal has proven nothing else, it's that the NSA isn't bound by geography.
And bucking the childhood admonishment, it certainly doesn't do the polite
thing and always ask permission first either.
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