Germany's Interior Minister Hans-Peter Friedrich, the country's top security official, cautioned privacy-conscious residents and organizations to steer clear of U.S.-based service companies, according to the Associated Press. Friedrich is by no means the first E.U. politician to issue this type of warning, and as details continue to emerge about the U.S. government's widespread surveillance programs, such warnings are certain to garner greater attention.
That can't be good news for companies like Microsoft, Google, Facebook, Amazon, or any other major tech company with a global presence that's struggling to gain and maintain footholds in the growing cloud-services market. These companies already have to contend with salvaging their reputations here at home in the wake of the leaks about the PRISM program; now they'll have to redouble their PR efforts overseas to assuage the privacy concerns of current and potential customers.
According to the AP, Friedrich told reporters on Wednesday that "whoever fears their communication is being intercepted in any way should use services that don't go through American servers."
Notably, other European officials have been beating this same drum well before the PRISM program was exposed: Earlier this year, for example, privacy expert Caspar Bowden, former privacy adviser to Microsoft Europe, warned European citizens not to use cloud services hosted in the U.S. for fear of spying. He said that under the Foreign Intelligence Surveillance Act Amendments Act of 2008 (FISAAA), U.S. intelligence agencies are permitted to access data owned by non-U.S. citizens stored on clouds hosted by U.S. companies.
Back in 2011, Ivo Opstelten, the Dutch minister of safety and justice, said that U.S. cloud providers could be excluded from Dutch government bids due to requirements of the Patriot Act. He later amended his decision, saying that it was "a conflict of legislation that should initially be resolved between governments. Legislation to negate the American claim would mean that companies can no longer do business in both the United States and Europe."
Those specters of doubt about data security have already cost U.S. companies business overseas, too. For example, back in 2011, a British defense contractor killed plans to use Microsoft Office 365 due to data privacy concerns, according to Computer Weekly. Canadian health care companies have also steered clear of the cloud for fear that "any patient data put into cloud-based health IT systems from a U.S.-based software provider would be scanned by the NSA," according to Ars Technica.
If there's a silver lining to the U.S.'s surveillance programs costing Fortune 500 companies business, it's that these corporations may have the deep pockets and influence to sway U.S. politicians to make changes to PRISM.
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