Economic consequences of spying

Posted on November 15, 2013  /  0 Comments

I touched on this issue at the cloud computing session at IGF 2013 in Bali. The scandal of NSA and CIA spying is likely to do serious damage to US firms. I for one do not place much faith in the good behavior of any government and do not see much point in simply replacing American companies with non-American.

The backlash against government Internet surveillance could hurt the United States economy, partly because businesses and consumers could abandon United States cloud companies, said Richard Salgado, the director for law enforcement and information security at Google, in testimony before the Senate judiciary subcommittee on privacy, technology and the law.

He cited studies like one from Forrester that predicted the cloud computing industry could lose $180 billion, 25 percent of its revenue, by 2016.

Already, countries like Brazil are considering so-called data localization laws, which would require that all data related to Brazilian companies and citizens be stored in Brazil. This movement “has gained considerable traction since the revelation of the Prism program,” Mr. Salgado said, and added that companies like Google “could be barred from doing business in one of the world’s most significant markets.”


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