
Revelations of N.S.A. Spying Cost U.S. Tech Companies - cottonseed
http://www.nytimes.com/2014/03/22/business/fallout-from-snowden-hurting-bottom-line-of-tech-companies.html?hp&_r=0
======
jobu
"Even as Washington grapples with the diplomatic and political fallout of Mr.
Snowden’s leaks ..."

That statement is a perfect example of the _real_ problem with the US
government and many journalists. They don't see the actual spying as the cause
of all the backlash - it's all Snowden's fault for telling the world.

~~~
tylerkahn
I'd prefer journalists themselves not take a position on the spying or what
Snowden did.

The statement contains no judgement either way.

Sounds like you're the target market for Glenn Greenwald's new news
organization.

[https://firstlook.org/](https://firstlook.org/)

~~~
dreamfactory2
No such thing as a neutral position. Journalism editorialises by definition.

~~~
Spooky23
Not true. It is quite possible to report both sides of a story. Fair reporting
doesn't mean opinion less.

~~~
dreamfactory2
This is logically impossible. Journalists selectively choose what to write
about - this is an act of curation. This is further editorialised by the news
organisation. What do you think an editor does and why does every news
organisation employ tiers of them?

Even calling it a story is well, telling a story. Presenting in terms of two
sides further frames as a kind of dramatic fiction.

There is nothing wrong with all this and it makes news interesting and
sometimes even edifying. Adam Curtis is an example of somebody who very
blatantly selects and uses dramatic technique in order to shine light and show
new perspectives on contemporary history.

The danger is in kidding yourself that it could be any other way and that
there is some kind of objective and balanced position which reasonable folk
hold - that's how people get manipulated, usually against their interests and
sometimes in awful ways.

~~~
mpyne
> This is logically impossible. Journalists selectively choose what to write
> about - this is an act of curation. This is further editorialised by the
> news organisation. What do you think an editor does and why does every news
> organisation employ tiers of them?

By that logic it is logically impossible to ensure fairness in a judicial
system. Should we then just give up and tell judges to do what they want
instead of striving for the ideal of due process under the law?

~~~
dreamfactory2
As far as I know, courts aren't in the business of selecting juicy stories to
get an audience to sell ads to (Judge Judy maybe).

Since you bring it up, that a court can't be completely certain is of course
one of the main arguments against the death penalty - plenty of faulty
convictions that we know of to back that up.

There's a much bigger difference though and that is that news outlets are
mostly in private hands and usually quite openly run an editorial line. How
would you feel about Murdoch or the Koch bros running the judicial process if
you are certain the press are and will remain so even-handed? N.B. I'm not
even saying this is necessarily a bad thing wrt journalism, just not to be
fooled that it is something else (and which it often purports to be). Any
adult should know that it's both foolish and dangerous to believe what you
read in the press.

------
minimax
The Forrester note† that the article links to is a little more balanced that
the NYT article. If you don't have time to read the whole thing, here are some
good quotes:

 _It 's naive and dangerous to think that the NSA's actions are unique. Nearly
every developed nation on the planet has a similar intelligence arm which
isn't as forthcoming about its procedures for requesting and gaining access to
service provider (and ultimately corporate) data. As stated in the ITIF
report, German intelligence has the G10 act which let's them monitor
telecommunications traffic without a court order._

 _The fact of the matter is that the IT services market is a part of our
portfolios because it provides capabilities we value either against IT or
business metrics. And it 's highly likely these values are worth more to you
than the potential risk you think your company faces due to government
surveillance. And if your company is a prime target for government
surveillance, you are probably being watched from within your own firewalls
right now._

 _... you can take actions yourself to protect your data from prying eyes when
using these services. A quick tip: bring your own encryption. If you hold the
keys the governments can 't get to your data by going through your service
provider._

†[http://blogs.forrester.com/james_staten/13-08-14-the_cost_of...](http://blogs.forrester.com/james_staten/13-08-14-the_cost_of_prism_will_be_larger_than_itif_projects)

~~~
danieldk
What I found most surprising about Germany is that the people here are really
insistent on Datenschutz (data protection) and hesitant to e.g. use Google
services or Dropbox, while its law enforcement is among the top requesters for
data:

[http://www.google.com/transparencyreport/userdatarequests/co...](http://www.google.com/transparencyreport/userdatarequests/countries/)

~~~
gaius
Well that is the legacy of East Germany, reflected in both citizens concerns
and police habits.

~~~
dredmorbius
It goes back before East Germany as well.

------
ddlatham
It's not the revelations that are costing the tech companies. It's the spying.

~~~
gatehouse
Yeah, by the same logic, the NYT causes anguish by reporting on tragedies and
disasters.

EDIT: ALSO:

> _Despite the tech companies’ assertions that they provide information on
> their customers only when required under law — and not knowingly through a
> back door — the perception that they enabled the spying program has
> lingered_

Nobody cares if data leaks are intentional or legal. When China was suspected
of backdooring routers in 2012 I don't recall anyone caring if it was
intentional by the Chinese Tech Companies, or the legality of it _if_ it was
intentional. The Congress issued a report saying :

 _Chinese telecommunications companies provide an opportunity for the Chinese
government to tamper with the United States telecommunications supply chain.
That said, understanding the level and means of state influence and control of
economic entities in China remains difficult. As Chinese analysts explain,
state control or influence of purportedly private-sector entities in China is
neither clear nor disclosed.34 The Chinese government and the Chinese
Communist Party, experts explain, can exert influence over the corporate
boards and management of private sector companies, either formally through
personnel choices, or in more subtle ways.35 As ZTE’s submission to the
Committee states, “the degree of possible government influence must vary
across a spectrum.”36

[...]

Recommendation 2: Private-sector entities in the United States are strongly
encouraged to consider the long-term security risks associated with doing
business with either ZTE or Huawei for equipment or services. U.S. network
providers and systems developers are strongly encouraged to seek other vendors
for their projects._

[http://intelligence.house.gov/sites/intelligence.house.gov/f...](http://intelligence.house.gov/sites/intelligence.house.gov/files/documents/Huawei-
ZTE%20Investigative%20Report%20%28FINAL%29.pdf)

~~~
TeMPOraL
> _Yeah, by the same logic, the NYT causes anguish by reporting on tragedies
> and disasters._

In some way it does. The side effect of all this reporting is population
getting increasingly and predictably more stupid (availability heuristic, for
starters) AND stressed at the same time.

~~~
smtddr
I'll take this one step further.

Television news, at least mainstream TVnews in USA, is a totally stress/fear
inducer purposely delivered in the most dramatic and usually shallow way
possible, so you stick around for the commercials and at the same time the
elists influence the viewers' political decisions.

Almost everyone would be better off without it as it exists today.

------
ihsw
> [IBM] is spending $1.2 billion to build cloud computing centers around the
> world to lure foreign customers who are sensitive about the location of
> their data.

IBM et al are still American companies, and until they're immune to American
legislation (ie: FISA Section 702) then no-one will touch them with a fifty-
foot ethernet cable. The location of the data is irrelevant.

The US Government will not budge on this issue, and they will happily throw
the entire tech industry under the bus. Bailing out Silicon Valley and
nationalizing as much as possible is very appealing, too.

~~~
techtalsky
I'm a little surprised this wasn't emphasized in the article. It doesn't
matter where the equipment is: the us government can still secretly force you
to backdoor it and lie to your customers and the press about it.

~~~
yulaow
For that there is the solution to create a company branch legally indipendent
from the main one, so all the assets linked to it would be under the
legislation of the state in which they are

~~~
bsder
Do you really think that IBM would jeopardize its enormous contracts with the
US federal government because some subsidiary won't/can't get at data?

You have a lot to learn.

~~~
toomuchtodo
Didn't they lose the CIA's cloud computing contract to Amazon? How much
international business are you willing to lose for the harsh US government
mistress?

------
sschueller
What I find scary is the amount of datacenters being built by US companies
abroad.

For example Equinix is building large datacenter all over Switzerland. Swiss
companies are blindly trusting them with their equipment. Equinix controls the
keys and access to you racks and cages. They can get to your hardware with
ease and surely will when is US government asks no matter what Swiss laws may
say.

What I also find suspect is the amount of investment banks (never heard of any
of them before) in these datacenters with large cages of machines. Are they
really investment banks or a cover for machines where the NSA stores data. If
they can monitor an entire nation for a month they have to store that data
somewhere close when dealing with such huge data volumes.

------
bsder
The solution to this isn't "different datacenters".

It's to go back to the original end-to-end internet so I can run my servers
_on my premises_.

That won't stop the NSA from targeting _me_ specifically. But it makes the
whole dragnet thing a lot harder when the data is coming from a million
physically distributed sources instead of 1,000 sources in _one_ datacenter.

------
sixothree
Personally I've been using fewer Google and other hosted services simply
because they make me feel 'icky'. More and more I use startpage for general
searches and tor for anything personal like medical information that I don't
want in my permanent record.

~~~
cottonseed
Same here. I'm almost completely off Google products. If you do keep using
Google products, make sure you disable location and web tracking. I deleted my
Facebook account. I switched back to Firefox. I use startpage and DuckDuckGo.
I switched my phone to CyanogenMod. I send everything through a VPN. I have
Thunderbird, instant messaging apps go through Tor, basically anything that is
asynchronous (although I don't use Tor for everday browsing -- it's just too
painful). I use TextSecure for SMS. Basically the same user exerience, but I
feel better.

I'm using Dropbox for now, but looking for alternatives. I wish there was a
better alternative to email.

~~~
danieldk
_I 'm using Dropbox for now, but looking for alternatives._

My wife and I have switched to Bittorrent sync. It's fast and you have the
amount of storage that your computers have. We have one very low-power machine
that is always on to assure that we can always sync.

Folders with important data are backed up using tarsnap.

------
arca_vorago
The issue of foreseeable consequences is one of the main points I have a
problem with. The public was sold war and surveillance to "protect" them, but
lets face the realpolitik, it was about "National Interests" and not "National
Security", which the totalitarian oligarchy like to conflate as the same. They
aren't, but even if they were, they had to have had at least a few analysts in
a dark room somewhere who figured this out and sent some reports up the chain.
(of course they probably got fired or sent to the mail room...) They knew this
was a possibility, that by turning on and growing the surveillance state and
trying to kill privacy that it would increase the possibility that the
programs would become public, and therefore undermine American credibility as
a safe haven.

I would present to you that, while they will claim they were unaware of this
potential, the reality is that they knew it, and accepted it, because what has
been happening is a power play in a currently fairly quiet but still major
shift in global power.

I've argued with my intel friends that they are off chasing bad guys OCONUS
when the real bad guys are in DC, NY, and London, but now those same entities
have a stranglehold on the intel agencies themselves (I mean, they always did,
the original CIA guys were all Wall Street old boys in the first place, but
now it's much worse in my opinion.)

Do we really think Hayden is the brain behind these moves? Or Hanlon's razor?
No. The surveillance issue is a symptom of a much larger issue at hand, and
until we take the discourse to that level there will be very little progress
made. All three branches and the fourth estate are corrupted, which undermines
our entire already weakened constitutional framework.

Now, the realpolitik they don't discuss with the public is that in the new
globalized world of supranational entities the concept of national sovereignty
is a lost cause.

My problem is that they made the decision to adopt this constitution
undermining policy without even having a public debate about it.

The oligarchy have said, in essence: "The proletariat serfs are too dumb (from
all the propaganda) to make informed decisions about their democracy,
therefore, we shall placate them with gladiatorial political shows while we
pull the strings from the shadows."

~~~
cryoshon
The proliteriat are dumb because they're constantly stuffed with propaganda
tailored to their low intelligence because it's assumed the proliteriat is
dumb. It's circular reasoning used to rationalize the unbalanced locus of
power.

~~~
wavefunction
proletariat

------
rdl
The main cost for me is that I plan to move myself and company to Berlin, DE
rather than Bellevue, WA. Given the vastly better hiring position, great
universities, CCC, and overall benefits of being in Europe, this seems to be a
negative cost overall.

So thanks, NSA.

~~~
DenisM
What's the visa/immigration situation like?

~~~
rdl
I had an MP personally mail me asking me to move my business there. In
general, it doesn't seem as bad as the US for immigration (from outside EU;
within EU it is trivial), but it's a bit bureaucratic and complex. As a funded
startup, it's not a big deal.

------
zmanian
If we as a society tolerate large scale institutions devoted to undermining
and exploiting trust, we will all be immensely poorer. Rule of law , robust
institutions and trustworthy systems are the basic infrastructure of the
economy. It is outrageous that nation states are attacking these foundations
for short term advantage.

------
whyme
How is it that IBM would gain business? They are still an American company
which makes them equally susceptible to this form of data theft. I can't see
handing my data over to IBM any more than I would Facebook or Amazon. Surely
the article could have picked a better example.

~~~
jonknee
Big Blue surely has clever enough lawyers to come up with a corporate
structure that works here. They probably just need a foreign subsidiary in
each country they want to do business in and have that subsidiary completely
own and control its data centers. If you're a German company your data is and
stays in Germany and would be subject to German law (which according to
Snowden may not mean a much for privacy).

~~~
whyme
I wish I could find the HN comment from a few months back addressing the same
idea. If I remember correctly there was consensus that the US govt has enough
legal power over American corporations to force their hand with even
independent international subsidiaries. As stated earlier, I wish I could find
the previous thread covering this.

------
dmix
I'm happy NYTimes changed the headline. It used to say "Edward Snowden Leaks
Cost US Tech Companies Millions"

Now they properly changed it to NSA spying as the cause.

~~~
ihsw
Read the title more closely -- the revelations are costing tech companies, not
the spying itself.

------
noir_lord
Good, if you engaged in the spying you deserve to be hurt.

If you didn't then that is unfortunate but hopefully they'll apply pressure to
those that did.

------
higherpurpose
Finally, some good news!

~~~
cottonseed
I have to agree. I'm very pessimistic about this whole situation, and this is
one of the few forces I can see that could have some positive impact.

------
TheSmoke
OT: is it allowed to post news / articles which require signing up? i'm in
turkey right now and every time i click for a nytimes link, i see this:
[http://imgur.com/e8VVI9v](http://imgur.com/e8VVI9v)

------
mariuolo
>IBM is spending more than a billion dollars to build data centers overseas to
reassure foreign customers that their information is safe from prying eyes in
the United States government.

Wouldn't IBM still be required to grant access even if the data is physically
located overseas?

------
sehugg
Not a lot here about China. One can only speculate whether they've been on top
of our surveillance efforts all along, and how much of the Golden Shield
project is about defense rather than censorship.

------
vegustui
US tech is dead in China.

------
Fasebook
Thanks for the news NYTimes

