Think Tank Warns U.S. Surveillance Efforts Undermine IT Industry

By Wayne Rash  |  Posted 2014-12-10 Print this article Print
Microsoft federal court appeal

NEWS ANALYSIS: As Microsoft files another appeal in its email warrant case, a conservative think tank issues a report warning that U.S. legal policy could promote the "Balkanization" of global IT markets.

Microsoft's Dec. 8 appeal to federal court orders that it turn over the contents of an email stored on servers in Ireland moves to the next stages in a case that appears destined to go all the way to the U.S. Supreme Court.

Whatever decision the U.S. Court of Appeals makes is certain to be appealed by whichever side loses. Now the only question becomes whether the Supreme Court will agree to hear the case to settle the matter once and for all.

Meanwhile in Washington, the American Enterprise Institute (AEI) is releasing a report on the effects of the current state of surveillance involving U.S. software, cloud and hardware companies, with particular focus on the Microsoft case.

The report, written by Georgetown University Professor Dr. Theodore Moran, finds that the collection of interlocking surveillance programs is endangering the ability of U.S. companies to compete abroad.

The report finds, for example, that a number of European governments will stop using products and services sold by Microsoft if the warrants seeking access to information held on European servers are upheld.

Likewise, Moran sees competing efforts by a variety of governments to protect their own companies and to allow access to U.S. data wherever it may be. These efforts could be far different, often in conflict, and would give U.S. companies no clear guidance on how to operate internationally. He warns that these trends are likely to result in the "balkanization" of IT services as foreign IT companies and governments try to use U.S. surveillance and legal policies as a lever to win competitive advantages.

While comments by a variety of government sources enumerated by Moran show that the federal government has repeatedly tried to minimize the risk and subsequent damage to U.S. companies, an insightful comparison he developed shows that in fact, there's a lot to worry about.

The goal of the report, which is discussed at AEI on Dec. 10, is to suggest ways that will encourage the U.S. and foreign governments to develop a set of rules for interaction that are both transparent and fair to all parties. Moran suggests that the existing Mutual Legal Assistance Treaties (MLAT) provide a framework to allow surveillance where required, while in the process protecting the privacy rights of citizens.

On his way to reaching his recommendations, Professor Moran provides an exhaustive analysis of existing laws and practices involving electronic surveillance, including the practices of the federal courts and various law enforcement and intelligence agencies. This examination is in itself a remarkably valuable primer on what's actually going on, how it works and how it impacts the various IT companies that have to deal with it.


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