WASHINGTON – International anger over the National Security Agency’s Internet surveillance is hurting global sales by American technology companies and setting back U.S. efforts to promote Internet freedom.
Disclosures of spying abroad may cost U.S. companies as much as $35 billion in lost revenue through 2016 because of doubts about the security of information on their systems, according to the Information Technology & Innovation Foundation, a policy research group in Washington whose board includes representatives of companies such as IBM and Intel.
“The potential fallout is pretty huge, given how much our economy depends on the information economy for its growth,” said Rebecca MacKinnon, a senior fellow at the New America Foundation, a policy group based in Washington. “It’s increasingly where the U.S. advantage lies.”
Any setback in the U.S. push to maintain an open Internet also could inflict indirect damage on companies such as Apple and Google that benefit from global networks with few national restrictions.
Almost 40 percent of the world’s population, or 2.7 billion people, are online, according to the International Telecommunication Union, a United Nations agency headquartered in Geneva.
Cisco Systems, the world’s largest maker of computer-networking equipment, said this month that the NSA disclosures are causing some hesitation among customers in emerging markets.
Orders in China fell by 18 percent in the three months ended Oct. 26. Elsewhere, Robert Lloyd, head of development and sales, said in a conference call Nov. 13 that “it’s not having a material impact, but it’s certainly causing people to stop and then rethink decisions.”
Revelations about the extent of U.S. surveillance that have been leaked to the media by former NSA contractor Edward J. Snowden have “great potential for doing serious damage to the competitiveness” of U.S. companies such as Apple, Facebook and Microsoft, said Richard Salgado, Google’s director for law enforcement and information security. “The trust that’s threatened is essential to these businesses.”
The spying revelations have led governments around the world to consider “proposals that would limit the free flow of information,” Salgado said. “This could have severe unintended consequences, such as a reduction in data security, increased cost, decreased competitiveness, and harm to consumers.”
Nations such as China and Russia that seek to impose more controls on the Internet are finding their views gaining ground. Rising economic powers, including India, Mexico and South Korea, are weighing further limits.
Brazil’s president, Dilma Rousseff, a target of NSA surveillance, is calling for a new conversation about Internet governance with support from Germany, whose chancellor, Angela Merkel, also was a target of NSA eavesdropping.
The uproar in Germany will probably hurt Akamai Technologies’ business there, according to Tom Leighton, CEO of the Cambridge, Mass.-based company that helps corporate customers deliver online content faster.
“It’s clearly bad for American companies,” Leighton said.