U.S. Cyber-Surveillance Demands Keep IT Innovation Offshore
Part of the problem, Scheidler said, is that government security agencies seem to feel they need a back door for any eventuality, but he said that this also isn’t necessary. As an example, he pointed to Tor, which is designed for secure communications, and which was developed and is maintained by the Naval Research Laboratory in Washington, DC. Several U.S. government agencies including the U.S. State Department to distribute access to the Tor network to help oppressed minorities or human rights advocates in foreign nations avoid surveillance and oppression by their governments. It also happens that the Tor network has also been used by pedophiles for child exploitation, a fact which has been revealed in several high-profile FBI investigations and criminal prosecutions. However the result of the U.S. government’s strong-arm tactics against the technology industry is that some ground-breaking technology, especially in security, simply isn’t happening in the United States. Companies don’t want to find themselves forced to embed back doors, disclose encryption keys or take other actions that would weaken their products' security to comply with government demands.This is also no surprise. When the Edward Snowden leaks revealed the extent of U.S. cyber- surveillance, predictions were rife that this would hurt the U.S. technology sector. When the demands for surveillance expanded to include iPhones and foreign email servers, those predictions were stronger and more frequent. Revelations that the FBI’s National Security Letters were arriving at IT and communication service providers' offices by the thousands have raised the concerns even higher. While there is some legislative relief in the works, the mood outside the U.S. is that the government can’t be trusted to honor established international agreements or to respect privacy. While those companies developing products outside the U.S. may still sell their products here, many do not. Worse, in some cases, products from the U.S. aren’t trusted because of the potential for back doors in much the same way that the U.S. doesn't trust networking or communications products produced in China because of similar fears. The result of those concerns is that U.S. companies lose their competitiveness in international markets because it becomes more difficult to sell their products. Meanwhile U.S. service providers find that they have to contend with regulations that have become increasingly onerous. In one sense, the U.S. has found itself in a predicament of its own making. But that’s only part of the story. The companies that are being hurt by foreign reluctance to trust the U.S. didn’t make the rules and they aren’t willing participants in the over-reaching demands of U.S. surveillance efforts. But U.S. companies are now paying the price for their own government’s actions.
While a few companies such as Apple and Microsoft are big enough to resist government demands to weaken product security, most companies are not. The choice is clear for companies that are already located outside the U.S. They can avoid complying with such demands by staying out.