Obama reassures Internet CEOs on tech privacy

March 22, 2014 by Josh Lederman
This Feb. 24, 2014 file photo shows Facebook Chairman and CEO Mark Zuckerberg during a conference in Barcelona, Spain. President Barack Obama is meeting with CEOs from leading Internet and technology companies to discuss their concerns about privacy and National Security Agency programs. The White House says Obama will host the leaders Friday in the Oval Office. The meeting comes two months after Obama gave a speech proposing changes to NSA spying programs following public and industry concern. Google CEO Eric Schmidt and Netflix CEO Reed Hastings will join the meeting. So will Drew Houston of the file storage site Dropbox and Mark Zuckerberg of Facebook. (AP Photo/Manu Fernandez, File)

President Barack Obama sought Friday to assure leading Internet and tech executives that his administration is committed to protecting people's privacy, a week before a self-imposed deadline for a review of National Security Agency programs.

CEOs from Facebook, Google, Netflix and others spent more than two hours with Obama in the president's White House office discussing their concerns about NSA spying programs, which have drawn outrage from tech companies whose data have been scooped up by the government. Joining Obama and the CEOs were Obama's commerce secretary, homeland security adviser, and counselor John Podesta, whom Obama has tasked with leading a review of privacy and "big data."

Facebook CEO Mark Zuckerberg and his colleagues departed the White House without speaking to reporters. The White House said Obama gave the CEOs an update on the big data review, which is examining the complex and evolving relationship between the government, its citizens and their private information.

"The president reiterated his administration's commitment to taking steps that can give people greater confidence that their rights are being protected while preserving important tools that keep us safe," the White House said in a statement.

This Sept. 26, 2013 file photo shows Google Chairman Eric Schmidt speaking in New York. President Barack Obama is meeting with CEOs from leading Internet and technology companies to discuss their concerns about privacy and National Security Agency programs. The White House says Obama will host the leaders Friday in the Oval Office. The meeting comes two months after Obama gave a speech proposing changes to NSA spying programs following public and industry concern. Google CEO Eric Schmidt and Netflix CEO Reed Hastings will join the meeting. So will Drew Houston of the file storage site Dropbox and Mark Zuckerberg of Facebook. (AP Photo/Mark Lennihan, File)

Separate from the big data review, Obama in January directed the government to develop and present alternatives for who should store the phone records from hundreds of millions of Americans that the NSA holds. Obama gave the Justice Department until March 28 to report back, with an eye toward eventually stripping the massive data collection from the government's hands.

That review and other limits on secret spying were prompted by disclosures from former NSA systems analyst Edward Snowden that enraged Internet companies like Google when it was alleged that the NSA had secretly tapped into the main communications links that connect Yahoo and Google data centers around the world.

In the lead-up to Friday's meeting, Zuckerberg took to his own Facebook page to strongly condemn Obama's administration for its secret spying tactics, following reports that the NSA had once used spoofs of the social network to infect computers with malware.

Facebook said Zuckerberg raised his concerns directly to Obama on Friday and was grateful for his personal engagement. In a statement, the company called it an "honest talk" about government intrusion and its toll on people's confidence that the Internet is free and open.

"While the U.S. government has taken helpful steps to reform its surveillance practices, these are simply not enough," said Facebook spokeswoman Jodi Seth.

Google recently enhanced the encryption technology for its flagship email service to make it harder for the NSA to intercept messages moving among the company's data centers. Yahoo has promised similar steps.

Representatives for Google and Netflix declined to comment on Friday's meeting. Also attending the session were Reed Hastings of Netflix and Drew Houston of the file storage site Dropbox.

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3 / 5 (2) Mar 22, 2014
Despite assurances to the contrary, there is a perception that American technology products enabled the government spying program, and the questioning of trustworthiness is having economic ramifications for companies like IBM and Microsoft.

According to a report in The New York Times, Daniel Castro, a senior analyst at the Information Technology and Innovation Foundation, estimates the cloud computing industry could lose $35 billion over the next two years. Forrester Research, a technology research firm, predicts those losses could escalate as high as $180 billion.

In a meeting with President Obama on Friday at the White House, tech executives, including Eric E. Schmidt of Google and Mark Zuckerberg of Facebook, were expected to express their frustration over the government's exacerbating of a costly situation.

"Most of the companies in this space are very frustrated," Castro told The Times, "because there hasn't been any kind of response that's made it so they can go back to their customers and say, 'See, this is what's different now, you can trust us again.'"

Anti-American sentiment first arose with the introduction of the Patriot Act, the counterterrorism law expanding government surveillance powers passed in the wake of 9/11, according to Mark J. Barrenechea, who heads OpenText, Canada's largest software company. He said the attitude has worsened "post-Snowden."

That lingering distrust has emboldened other foreign tech companies while continuing to steer potential business away from the US.

Norway's Runbox, which has marketed itself as a safer email service alternative to Gmail by saying it does not comply with foreign court orders seeking personal information, reports a 34-percent increase in customers. Meanwhile, Brazil announced it was ditching Microsoft Outlook for its own email system that uses Brazilian data centers.

"Issues like privacy are more important than finding the cheapest price," Matthias Kunisch, a German software executive, told The Times. Kunisch chose Deutsche Telekom over other US cloud computing providers.

"Because of Snowden, our customers have the perception that American companies have connections to the NSA," he said.

Lost business isn't the only economic impact being felt. The addition of state-of-the-art encryption features to customer services and to the cables that link data centers is costing companies dearly. IBM said in January that it would spend $1.2 billion to build 15 new overseas data centers to draw foreign customers sensitive about the location of their data. Salesforce.com has announced similar plans.

Getting relief from the government may be difficult.

Firstly, there is no concrete price tag for the damage being made available. According to The Times, Silicon Valley is complaining about economic harm stemming from federal actions but is reluctant to offer exactly what that number is, potentially out of fear of alarming shareholders. Secondly, some sectors of the business are claiming not to have been impacted "in a major way," as Cisco Systems CEO John T. Chambers told The Times.

"Companies need to keep the priority on the government to do something about it," James Staten, a cloud computing analyst at Forrester, told The Times, "but they don't have the evidence to go to the government and say billions of dollars are not coming to this country.
3 / 5 (2) Mar 22, 2014
The documents, if true, show that Microsoft charges the FBI hundreds of thousands of dollars a month for complying with legal requests for customer data, at a rate of between $100 and $200 for each request. The Daily Dot reports:

In December 2012, for instance, Microsoft emailed DITU a PDF invoice for $145,100, broken down to $100 per request for information, the documents appear to show. In August 2013, Microsoft allegedly emailed a similar invoice, this time for $352,200, at a rate of $200 per request. The latest invoice provided, from November 2013, is for $281,000.

There's nothing wrong with Microsoft doing this. In fact, it's a good thing they charge the FBI, because that at least provides the tiniest of barriers to the federal government flooding companies with requests for users' private data.
Of course, $100 or $200 is chump change for the feds and for Microsoft. And Microsoft told the Daily Dot that it doesn't cover all of the company's costs .
3 / 5 (2) Mar 22, 2014
The only real news here (NOT THE DISSOCIATED PRESSES VERSION)is a reminder about how easily available your data is to the government when they want it. Getting your private information is nothing more these days than a simple bureaucratic procedure, and a bit of financial housekeeping for companies like Microsoft and Google.

3 / 5 (4) Mar 22, 2014
Obama reassures Internet CEOs on tech privacy

Unfortunately, what OBAMA! says is meaningless...

Mar 23, 2014
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