NSA Surveillance Puts U.S. Companies at Competitive Disadvantage

Look elsewhere for privacy

American companies have much to lose from these government surveillance programs. When foreign businesses and customers lose confidence that American companies can maintain confidentiality in their business dealings and financial transactions, they will likely look for other, more secure partners. According to a report released last week by The Information Technology & Innovation Foundation, NSA surveillance could cost the U.S. cloud computing industry anywhere from $22 to $35 billion over the next three years if "foreign customers decide the risks of storing data with a U.S. company outweigh the benefits."

And trying to find privacy-protecting workarounds appears to be getting more difficult, as Ladar Levison of the Texas-based secure e-mail provider Lavabit, LLC recently learned. He suspended operations last week rather than submit to government surveillance demands, warning, "I would _strongly_ recommend against anyone trusting their private data to a company with physical ties to the United States."