We flagged this as a critical issue in our contribution to the UNCTAD Information Economy Report, written before Snowden. Now the rubber is hitting the road and billions of revenue are at stake.
The Snowden leaks and the view that American tech companies were too cooperative with the United States government have hurt the prospects for American tech companies abroad. Earlier estimates of potential lost sales over the next few years have ranged as high as $180 billion, or 25 percent of industry revenue, according to Forrester Research.
To address those concerns, the companies are building more data centers abroad. But that strategy looks less appealing if companies can be ordered to hand over data regardless of where it is stored, as Microsoft is being ordered to do.
In its filing, Microsoft emphasized that point. The government’s position, it warned, will “ultimately erode the leadership of U.S. technology companies in the global market.”