Europe vs Google et al: Long term ramifications of the Snowden Revelations?

Wall Street Journal had an interesting piece today where they discuss how the "clash that pits [European] governments against the new tech titans, established industries against upstart challengers, and freewheeling American business culture against a more regulated European framework". For example, "[t]he European Parliament in late October called on Internet companies operating in the region to “unbundle” its search engines from its other commercial properties". The obvious company that would be impacted by this is Google (and the WSJ article notes that Microsoft is aiding and abetting such calls to help boost its own profile).

However, the WSJ article notes: "And perhaps most fundamentally, it is about control of the Internet, the world’s common connection and crucial economic engine that is viewed as being under the sway of the U.S. This exploded following the revelations by Edward Snowden of widespread U.S. government surveillance of Americans and Europeans—sometimes via U.S. company data and telecommunications networks."

This would not be the first article to note that the Snowden revelations have put a chill on the move to the (US) cloud. However, it does highlight how far the revelations have gone to force the hand of European regulators to at least act in public like they are trying to do something to protect the data of their companies.

What the article did not into much detail is the likely reason that the Europeans are concerned. Although it may presented to be an issue of privacy or anti-surveillance, the likely real reason is industrial espionage.  As per the Snowden revelations, governmental spy agencies are not just interested in obtaining information on matters relating to national security, but are also interested in obtaining data related to international trade or other business dealings. As noted by the CBC, “NSA does not limit itsespionage to issues of national security and he cited German engineering firm,Siemens as one target”. It is unfair just to single out the US for such actions, as other governments do it as well. For example, Canada’s CSEC is also alleged to be involved in similar activity. The Globe & Mail reporting that “Communications SecurityEstablishment Canada (CSEC) has spied on computers and smartphones affiliatedwith Brazil’s mining and energy ministry in a bid to gain economic intelligence.” Former Carleton University Professor Martin Rudner explains (in the same G&M article) that the objective of such surveillance is to give Canadian government a leg up during negotiations, such as NAFTA. 

Although most have forgotten the commercial rivalries (see quote from then US president Woodrow Wilson about the roots of international conflict) that exist between the G8 Nations, it is important to understand the implications that this has for data security on the cloud. Anything that is sensitive and is relevant to business dealings should never be put on the cloud. Of course it is a matter of judgment of what constitutes "sensitive", but the criteria can effectively "reverse engineered" based on what was revealed.

Huawei & ZTE: Corporate spies or victims of non-tariff trade barrier

On this episode of the TWIT network's Tech News Today had an interesting discussion regarding the recent allegations that Huawei and ZTE were spying on US companies that purchase and use their equipment. As they hosts of the tech news show pointed out, Congress does not have any evidence that the firms were involved in such activity, but were rather concerned with the relationship of the two companies with the Chinese government. Another interesting point that they pointed out was that Cisco would benefit from such a ban. And according to this article, Cisco has paid $640,000 in lobbying on "measures to enhance and strengthen cyber security". As one analyst quoted by Bloomberg put it, "This is going to allow Cisco and Juniper to compete more fairly". However, Huawei too has been lobbying the US government to the tune of  $820,000. Although many have cited Chinese hackers as a threat, for example, it is suspected that Nortel was targeted over a ten-year period by such hackers. However, it is important to recognize that other factors are at play on the specific issue of ZTE and Huawei and that the risk of Chinese hacks should not be overstated. After all, non-Chinese companies do conduct industrial espionage against one another. For example, SAP had to pay $120 million to Oracle for such activity, which occurred in 2007. But if you raised the threat of German firms hacking to get into American companies, people would think you are not well. So although this threat is real, it is not new and it's not just coming from the Chinese.