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US Tech Companies Expected To Lose More Than $35 Billion Over NSA Spying
Patrick O'Neill writes: Citing significant sales hits taken by big American firms like Apple, Intel, Microsoft, Cisco, Salesforce, Qualcomm, IBM, and Hewlett-Packard, a new report says losses by U.S. tech companies as a result of NSA spying and Snowden's whistleblowing "will likely far exceed" $35 billion. Previously, the Information Technology and Innovation Foundation put the estimate lower when it predicted the losses would be felt mostly in the cloud industry. The consequences are being felt more widely and deeply than previously thought, however, so the number keeps rising.
Should be a great improvement for gun sales though.
If they weren't in Collusion with the US Government, and were the SEPARATE entities that they are SUPPOSED to be, they wouldn't have this problem.
This is PEOPLE voting with DOLLARS.
If you want to do illegal things, we WILL STOP BUYING YOUR PRODUCTS!
Period.
So all these companies are afraid of US spying, so they buy the equipment from Chinese companies. They are so much more trustworthy.
ABC Anywhere But China.
Government actions have no cost on businesses. ;-)
as a result of NSA spying and Snowden's whistleblowing
Could anyone give us a sensible and argumented answer as to how a mere whistleblower's can cost the US economy that kind of money ?
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
But. Unless we develop into a World where each nation makes all of their own tech, which seems unlikely, somebody, somewhere else, will still be using exported tech as surveillance machinery.
It just won't be the US as much.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
The NSA fallout here is astonishing. We're a Type A Agency with me as prime IT guy/consultant for everything and a half-assed Wordpress Pipeline for web projects. We don't do big things but we do quite a few as Agency Project spinnoffs and sideprojects. What strikes me is how many customers specifically ask for hosting on German soil, Google-free tracking and such - even for projects where it shouldn't matter that much. The point is, they don't want to make them selves vulnerable in case of a data-breach. Germany privacy laws are pissy like that.
Bottom line:
The negative press the US IT industry has gotten with NSA and such has a measurable impact - I myself am surprised.
We suffer more in our imagination than in reality. - Seneca
as a result of NSA spying and Snowden's whistleblowing
Also, FTA:
The actual losses "will likely far exceed $35 billion," according to the ITIF report, because the entire American tech industry has performed worse than expected as a result of the Snowden leaks.
Serious question. Does the leak actually count as part of the cause? I know if everything were still under wraps the spying might not have cost tech companies anything in lost sales, but it seems unfair to suggest that Snowden is partly responsible for the consequences of what he revealed simply because the consequences MIGHT have been avoided or at least delayed if he hadn't revealed it. I might just be making something out of nothing, it just seems like a dick move to act like it's his fault the way some people make it out to be. Not that it's anything new, but it was almost excusable when this was fresh and people still didn't fully understand the situation, now we've all had enough time to take it in and figure out who the real bad guys are.
What does it matter how much business the US loses, and how poor they get as a nation as a result of all of the spying? At least they are safe from threat.
Right?
US Industry (Cisco et al) betrayed a basic position of trust. They did so when they helped facilitate the Great Firewall of China and assisted the Chinese government in imprisoning dissidents. Hell, they did when obese captains of industry were on TV signing accords with Chinese politicians days after the Tiananmen Square massacre.
However, facilitating the NSA's indiscriminate violation of everybody's privacy worldwide was a step too far for just about everyone, and now they are getting the smackdown they so richly deserve after decades of betraying our most basic, sacred constitutional principles.
In short, fuck every tech company who cooperated with the NSA. You haven't even begun to get what you deserve.
The Future of Human Evolution: Autonomy
I, for one, appreciate that it takes money to protect my freedom from terrorists. I have nothing to hide
I might even use so-called "free" software one day if it would stop circumventing the efforts of those trying to protect us. In the meantime I'll stick with Microsoft and Apple.
Says the person posting as A C.
You're messin' with my Zen Thing, man.....
The losses won't stop until either the clients have confidence in their ability to secure the systems or the NSA learns boundaries.
The companies can't afford to blow this off. They are losing too much money to not resolve the issue.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Italicized text to be deleted for use in mainstream news reports.
Lacking <sarcasm> tags,
have halted
Citation, please? What has stopped?
Populus vult decipi, ergo decipiatur...
"Force shits upon Reason's back." - Poor Richard's Almanac
Sigh. I remember my first troll...
We don't have a state-run media we have a media-run state.
While some international sales have taken a hit, keep in mind that there are plenty of domestic companies serving the anti-terror space that have sprung up and are employing Americans. http://rectasecurity.com/ as an example.
One of the recommended fixes to this problem as stated in the article is "Complete trade agreements like the Trans-Pacific Partnership" - to which I say BULLSHIT. Americans do not want the TPP or anything like it.
How else are they going to pay zero taxes?
Driving one morning, I was stopped at a roadblock by my local police - under the pretense of checking my registration; which is all computerized and there's no need for visual inspections.
There are legislatures around the US who want to ban police recording. See, in the US a police officer can shoot someone - anyone - as long as he calls in that the person "reached for my gun" immediately. If it's recorded though, he may get prosecuted.
My government can spy on me with impunity.
People are sent to prison for life for minor drug offenses. And we have more people imprisoned than China.
The US has shown that just because a government is elected by the people, it can still be a fascist police state.
TFA quotes this estimate to Information Technology and Innovation Foundation (ITIF). This is not a source that I would trust to give estimates on the amount of US business lost due to public knowledge of NSA industrial espionage.
Another publicly available and reliable source of attributing business losses to external factors already exists: public company 10-K reports, including the Risk Factors section and the MD&A section.
Although there may be a bandwagon effect, or a "bath" effect which may cause overstatement, this will provide a great upper bound for the actual business lost due to these reasons. Companies CYA by disclosing all kinds of risks, including even some of these obvious items:
> ENTRANCE INTO NEW OR DEVELOPING MARKETS EXPOSES US TO ADDITIONAL COMPETITION
> Difficulties in staffing and managing international operations
So, when we start seeing real companies blaming their missed results on this reason, then I will see the reason as credible.
-- I was raised on the command line, bitch
Very interesting, so thanx for sharing!!
I haven't seen any estimates on the benefits/profits to US (tech) companies from the industrial espionage part of the NSA spying published anywhere? Would anyone have a number or a link to a source?
Just trying to get some perspective here.
There was a report issued by the European Parliament some years ago about how the NSA used the Echelon system on behalf of US corporations to spy on their competitors. That report cited somel successful NSA industrial espionage operations but it is a bit dated now. Back then the conclusion was that any company that did not switch all of its communications to encrypted tech and didn't hire security consultants was basically asking the NSA to hand its trade secrets to American competitors (and I'm sure the same applies to US companies vis a vis Russian/Chinese/European competitors). Of course very few people listened back then. I'll be disappointed if the NSA hasn't taken their industrial espionage operation to the next level since then. I keep hoping the the European Parliament will issue an updated second edition of this report.
If you're a person and you download a song, the FBI breaks down your door, confiscates your computer, and the prosecutor will haunt you until you commit suicide because he's talking millions in fines and decades of prison.....
But the NSA can cause $35 Billion in damage making copies of everyone's data (including songs); and not a peep from anyone.
You'd think a company hard-hit, yet with deep pockets (Oracle?); and an ego-manical CEO, would bring a lawsuit against the NSA for the damages.
But no. Apparently when you're the 800-pound gorilla, you can basically ignore the rule of law. The NSA could be shooting citizens in the head live on national TV and nobody would do anything.
If telephones are outlawed, then only outlaws will have telephones.
It's not halted, but lots of companies are now building out data centers in other countries so they don't have to deal with the NSA's nonsense.
Is it time for a class action lawsuit against the NSA? Clearly their actions (as well-intentioned as they may have been) have caused significant, long-lasting damage. Maybe Snowden can join in - it seems his life has been somewhat affected too.
- The Kessel run is for nerf herders. I can circumnavigate the entire Central Finite Curve in a lot less than 12 parse
This article doesn't argue for curtailing the NSA to benefit US businesses but in promoting these crazy trade agreements to make it illegal for other countries to avoid the NSA. The idea being that if people can't just avoid US companies to avoid the NSA then these other countries will have no competitive advantage.
I generally hated the proposed trade agreements but now I despise them.
Plus I am seeing highly promoted links to this article all over the web. I saw multiple attempts to get this on reddit when finally their army of shill voters managed to get it to the front page.
Of course this MUST mean more US tech workers are to be laid off and replaced by H1B visa holders.
Thank you NSA!
More proof the US government wants people to be out of work.
As the financial damage continues climbing, perhaps those companies who collude with the US Government will use this as a learning opportunity for future decisions. Assuming the impacted companies ultimately survive that is. I would personally rather see those who colluded with the Government on this go down in the flames of bankruptcy because trust, once lost, is never fully regained.
If I were the shareholders, I would absolutely eviscerate them for risking not only the company, but the entire industry on what boils down to a rather piss poor decision on the companies part. At the bare minimum, the entire executive level of the company would be replaced since their trustworthiness is beyond redemption.
It's rather depressing to realize just how much of the United States is built upon lies and deceit. ( Are there ANY countries on the planet that aren't ? ) We've reached a point where the lies are completely obvious now, but no one cares and nothing changes. We elect one idiot vs. another only to confirm down the road they were nothing but lies as well. It's becoming painfully obvious that following the " laws " to try and resolve this like civilized people, just aren't working. Laws are meant for the little people. Not the for-sale-lawmakers and those with the financial means to manipulate them. .
It's really sad what the lust for power and greed does to the human species. It's downright embarrassing sometimes :|
So, other than the ultra-violence option, what exactly CAN be done to start turning this around ? Can it be turned around ?
Honest question. What is the "theoretical" benefit from the NSA spying? The U.S. gave up $35Bn (and, frankly, specific companies had the brunt of it), but is there "savings" because of our security?
I'm not trying to get into a political discussion of "NSA is over-stepping its bounds." I also realize that the "savings" is entirely implicit. But I do wonder if there are some other, immeasurable, benefits of the agency.
First off I am not defending the NSA's actions; I am just trying to give an honest answer to this question.
Since the stated goal is to protect America from attacks, looking at the financial costs of the 9/11 attacks is a good way to find the costs on the other side of the argument. According to the New York Times, the successful attacks on the World Trade Center had an immediate economic cost of $178 billion. This includes $24 billion for the value of life lost, using similar actuarial tables that insurance companies or wrongful death lawsuits would.
The $35 billion figure is over a 4 year period, so thats about $9 billion per year. With this reasoning, if the NSA PRISM program could prevent one 9/11 scale attack every 20 years, it could be argued that it is worth it. This does not count the actual cost of running the NSA operation though, but that allegedly only cost about $20 million so it barely factors in.
If you accept the argument that war is inevitable when the US is attacked like we were on 9/11, then the total cost of 9/11 could be closer to $3 trillion. If American was safe enough because of NSA spying that it didn't "need" to fight foreign wars, that would be a huge economic cost saver.
This obviously does not factor in the cost of our loss of freedom, but I am trying to play devil's advocate here.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
I, for one, appreciate that it takes money to protect my freedom from terrorists. I have nothing to hide
And innocent people have nothing to fear.
Hey, guess what. YOU don't get to determine what's "innocent".
Back in the 1800s, Heroin was a commercial product, cocaine was legal and you could stockpile weed without ending up in prison. These days, buying fertilizer can get you in trouble. For decades, alcohol was illegal There is virtually nothing so innocuous that some group cannot get all worked up about and make illegal and suddenly all your records about your little hobby can be used to put you away. Not just the obvious vices, but things like photography, home vegetables, choir practice and more.
I, for one, appreciate that it takes money to protect my freedom from terrorists. I have nothing to hide
And innocent people have nothing to fear.
Hey, guess what. YOU don't get to determine what's "innocent".
Back in the 1800s, Heroin was a commercial product, cocaine was legal and you could stockpile weed without ending up in prison. These days, buying fertilizer can get you in trouble. For decades, alcohol was illegal There is virtually nothing so innocuous that some group cannot get all worked up about and make illegal and suddenly all your records about your little hobby can be used to put you away. Not just the obvious vices, but things like photography, home vegetables, choir practice and more.
We are one major (not a joker or protester) incident away from having crippling regulations put on radio control aircraft.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
China? Europe? You gonna tell me they're any better? This is a global thing. The corruption in authority is universal.
“He’s not deformed, he’s just drunk!”
All of those listed are companies that were already in trouble. Now, they want to blame the NSA for a good chunk of their ineptness.
I prefer the "u" in honour as it seems to be missing these days.
Their last recommendation - Complete trade agreements like the Trans-Pacific Partnership that ban digital protectionism and pressure nations that seek to erect protectionist barriers to abandon those efforts - is a reminder why Europeans do not want the TPP enacted. There's a big difference between protectionism and now wanting to hand all you private data over to the NSA. The TPP basically enforces lower US standards of business on Europe where there's more red tape to protect small companies and consumers.
But what country that manufactures such equipment is likely free of similar problems? Where are the customers going instead?
Table-ized A.I.
German hands caught in the cookie jar:
http://www.nytimes.com/2015/05...
http://www.spiegel.de/internat...
Table-ized A.I.
Who is to say these companies didn't get even more money in return for backdoors, wiretaps etc?
In addition, people have gotten more careful. This will not make targeted industrial espionage harder, but a lot was of the "dragnet" type and any increased security will make that much more difficult and less effective. There are also techniques like subtly sabotaging what is sent over the wires and only communicating this in face-to-face meetings to the people that need to know.
That was the protection mechanism that causes the "capacitor plague" a few years back, where an additive needed in the electrolyte was only known to a small circle. When the recipe got stolen, the competitor buying it produced a mass of defective capacitors, which only became obvious about two years later. My guess is they lost so much business they came out with a massive net loss in the end.
The other thing is that companies will now look very careful for indications of industrial espionage in any new US product. Adding recognition-markers an leaving that knowledge with a trusted third party is not hard to do. I expect we will see lawsuits for this that will have really large compensation awarded to those wronged. We may also see products that may not be sold anywhere in the EU or maybe the world (except the US) as a result.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Only problem here is that the NSA cannot prevent a 9/11 style attack. I mean, the FBI knew about the perpetrators because the flight instructors where very puzzled that these people did not want to learn how to land (which shows the 9/11 attackers were not very smart), but failed to recognize relevance. Same happened on a much smaller scale just recently in Paris and in several other terrorist attacks.
This is not a data gathering problem, it is a data analysis problem, more spying is going to help exactly not at all and the data analysis needed failed time and again in the past and will continue to do so in the future. Also, all claims about "prevented attacks" are to be taken with a high level of suspicion, as making such claims is easy, but actually doing it is extremely hard.
Hence your assumption that the NSA can prevent the a 9/11-type attach is fundamentally and demonstrably flawed and unsound as basis of calculating cost/benefit of NSA spying.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Basically they got federal funding for developing sociogram enabling techs.
Let's be nice and say it was done by stealth VC notoriously linked to CIA and they were not aware of it. (the first social network (orkut from google) had its DNS served by In-Q-tel).
Money is about trusting (fiduceo = I believe/trust).
And now, after they took the money (which are subsidiaries as if USA was a communist country planning economy), built a monopoly based on these technologies (made even more money), they also want to be paid for the loss of money due to the loss of trust.
Shame does not exists?
Saying that NSA surveillance cannot prevent a 9/11 style attack is silly, although saying it most likely will not is far more accurate (IMHO). The New America Foundation think tank published a report claiming that of 225 investigations performed since 9/11, only 1.8% of them were initiated based on NSA bulk metadata surveillance and 4.4% of the cases were assisted by the NSA spying program. These are obviously low figures so by shear odds it is likely the next huge terror plot would not be caught by NSA metadata spying.
But considering PRISM allegedly cost $20 million of a total US intelligence budget of around $75 billion annually over the past few years, the NSA program could still be considered a bargain. Although probably not once you factor in $35 billion in lost GDP because of a new found lack of trust of USA companies abroad.
And once again, I was only playing devil's advocate and trying to explain the other side of the argument. I personally believe the costs to personal freedoms dwarf the benefits of all enhanced security related programs since 9/11.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
Old money's political influence sets-up a going-to-be-exposed collapse which strikes a blow against American ingenuity.
Now every American science, cloud, software, solar, tech, and service industries decrease while the old-money ready-for-disruption pipelines (military, oil, etc) keep flowing.
Science & open-source build trust from peer review. Learn systems you can trust.
What else is a company to do when somebody costs them billions?
People have know this since the Patriot Act originally came out. It allowed the US government to pretty much arbitrarily look at any of your data, provided it was located on US soil. So most of us have been avoiding using US servers, data centers, and companies for anything much important anyway. You can still use them, just not for anything critical.
The whole NSA thing may have made it a bit more high profile, but most of their partner groups, things like gmail and the like, nobody should be using for critical or sensitive information anyway. That is more about individual personal consumer use. Businesses using these sorts of services aren't presumably really aren't all that concerned about security anyway.
Well, yes, that was a weak "cannot" from my side, i.e. it is quite unlikely that they can.
I do fully agree that the loss of liberties is far, far worse than anything the snooping could prevent on a moral level. And there is also the economic problem with establishing a surveillance-, police- or totalitarian state: The economy of these types of states universally sucks. Just look at Nazi Germany, Northern Korea, the former Soviet Union, etc.
Hence neither the freedom angle, nor the economic angle make a good case for the spying the NSA does.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.