IBM Sued By Shareholders For Cooperating With The NSA... Decimating Sales In China

from the economic-impact-of-nsa-spying dept

Ever since the Snowden leaks began, we've been talking about how the harm for the US economy -- and especially the tech industry -- was going to be massive (much more damaging than anything the NSA might possibly prevent with its spying). We've already seen Cisco attribute poor earnings to the Snowden revelations, and now a large IBM shareholder is suing IBM, claiming that its relationship with the NSA resulted in the company's disappointing third quarter results:
The plaintiff in the complaint, Louisiana Sheriffs' Pension & Relief Fund, said this threatened IBM hardware sales in China, particularly given a program known as Prism that let the NSA spy on that country through technology companies such as IBM.

The Baton Rouge pension fund said the revelation of Prism and related disclosures by former NSA contractor Edward Snowden caused Chinese businesses and China's government to abruptly cut ties with the world's largest technology services provider.

It said this led IBM on October 16 to post disappointing third-quarter results, including drops in China of 22 percent in sales and 40 percent in hardware sales.
As for the legal basis for the lawsuit, the pension fund is arguing that IBM should have revealed the potential of this kind of information coming public as a "risk factor." Chances are this lawsuit will go nowhere, but it does highlight, yet again, just how damaging the NSA's activities can be on the US. When compared to how little the NSA has actually accomplished, according to various folks in Congress who have been briefed, it certainly seems like the NSA is doing a lot more harm than good. Hopefully this leads other companies to be much stronger in pushing back on the NSA's demands, knowing that it can significantly harm their business prospects outside of the US.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Dec 16th, 2013 @ 3:08pm

    Shareholders: NSA committing economic espionage is OK. Good for profit. Wait, what, it hurts profit too? Sue the b**tards!

     

    reply to this | link to this | view in thread ]

  2.  
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    Anonymous Coward, Dec 16th, 2013 @ 3:09pm

    Many of the contracts for services from US companies are long term. So the effect hitting those companies and corporations will be a long term drip effect. It is the sum total that will tell the tale. Already Finland is planning a new fiber optic cable that will bypass Sweden and go straight to Germany to avoid the NSA's spying habits in Sweden. That it was made a public announcement is a clue of what is coming. Increasingly the US will find it's backbone routers bypassed too, making it's spying that much harder.

    People worldwide, not just in the US are unhappy with all these revaluations and it will result in changes not beneficial to the US.

     

    reply to this | link to this | view in thread ]

  3. This comment has been flagged by the community. Click here to show it
     
    identicon
    Anonymous Coward, Dec 16th, 2013 @ 3:39pm

    Decimating or Annihilating?

    You *always* fuck that up, Mike.

     

    reply to this | link to this | view in thread ]

  4.  
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    Anonymous Coward, Dec 16th, 2013 @ 3:41pm

    Leave it to the spies to ruin the economy.

     

    reply to this | link to this | view in thread ]

  5. This comment has been flagged by the community. Click here to show it
     
    identicon
    out_of_the_blue, Dec 16th, 2013 @ 4:01pm

    The Federal Reserve undermining the country is far bigger.

    Mike never mentions the Federal Reserve printing "money" ($85 bilion a month or more: no one's really sure as central bankers lie so much) and kiting stock market prices which will necessarily have BAD effects, as any "economist" would know. Mike doesn't use his alleged degree for anything complex or even useful: heck, can't even find a bio on the site where mentions the alleged degree!

    But Mike does re-write the original story with the exact same take! Wow, it's like lighting a candle in the full noon sun! Yet another shining example of his easily imitatable style of keeping up with last week.

    The real if not only purpose of central banks is to get gov'ts so deep into phony debt that it can be used as excuse to enslave the people.

    12:01:40[n-2-4]

     

    reply to this | link to this | view in thread ]

  6.  
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    btr1701 (profile), Dec 16th, 2013 @ 4:09pm

    Sales Drop

    > including drops in China of 22% in sales
    > and 40% in hardware sales.

    Wow, that's a lot more than just a decimation in sales!

     

    reply to this | link to this | view in thread ]

  7.  
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    Mike Masnick (profile), Dec 16th, 2013 @ 4:47pm

    Re: Decimating or Annihilating?

    You *always* fuck that up, Mike.


    No, I like most of the world, recognize the modern meaning of the word, and don't stick lamely by the historical one.

    http://www.merriam-webster.com/dictionary/decimate
    http://www.thefreedictionary.com/decimating
    htt p://dictionary.reference.com/browse/decimate

     

    reply to this | link to this | view in thread ]

  8.  
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    Bpat, Dec 16th, 2013 @ 4:54pm

    Re: The Federal Reserve undermining the country is far bigger.

    While printing money is something dumb. It is off topic.

     

    reply to this | link to this | view in thread ]

  9.  
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    Anonymous Coward, Dec 16th, 2013 @ 5:15pm

    You mean there's a world outside the US? ;P

    Many American's don't seem to understand that there's a world outside their borders (unless there's a war to keep them entertained... ). Will this begin to wake them up?

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Anonymous Coward, Dec 16th, 2013 @ 5:36pm

    Re:

    NO!

     

    reply to this | link to this | view in thread ]

  11.  
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    Ac, Dec 16th, 2013 @ 6:16pm

    Bye Bye NSA

    Time for your government to get rid of the NSA, they are causing your country nothing but trouble.

     

    reply to this | link to this | view in thread ]

  12.  
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    Anonymous Coward, Dec 16th, 2013 @ 6:52pm

    Re: Bye Bye NSA

    Sorry but America is fresh out of spines... can we borrow yours?

     

    reply to this | link to this | view in thread ]

  13.  
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    out_of_the_blue, Dec 16th, 2013 @ 7:17pm

    what is 'world'

     

    reply to this | link to this | view in thread ]

  14.  
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    Anonymous Coward, Dec 16th, 2013 @ 10:07pm

    Re: Re: Decimating or Annihilating?

    Dude, the deci is in the word.

    I'll just call this literally ironic and now we have the hat-trick of sadly misused words.

     

    reply to this | link to this | view in thread ]

  15.  
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    Mike Masnick (profile), Dec 16th, 2013 @ 11:30pm

    Re: Re: Re: Decimating or Annihilating?

    Things change. Try to keep up.

     

    reply to this | link to this | view in thread ]

  16.  
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    Alana (profile), Dec 16th, 2013 @ 11:53pm

    So, another lawsuit trying to argue "lost profits"?

     

    reply to this | link to this | view in thread ]

  17.  
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    Ninja (profile), Dec 17th, 2013 @ 1:08am

    Wait till it snowballs. I wonder if the financial costs are worth keeping up with all the bs. I'd argue that upholding the Constitution is cheaper atm. Of course some people won't be earning much money if the Constitution is upheld.

     

    reply to this | link to this | view in thread ]

  18.  
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    Anonymous Coward, Dec 17th, 2013 @ 3:41am

    Re:

    Maybe IBM shareholders can sue US government for lost (future) profits under one of the ISDS clauses in any trade agreement...

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    Anonymous Coward, Dec 17th, 2013 @ 3:43am

    Re:

    Or even better...let IBM do the sueing.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    Anonymous Coward, Dec 17th, 2013 @ 4:47am

    the NSA, government nor other security agencies gave a toss what was happening before they got exposed, they give even less now. all they are doing is using Snowden as a scapegoat, taking none of the blame themselves. the USA economy is in worse shape than most other countries which were hit by the financial crisis. using any excuse they can think of, including doing totally one-sided 'deals' with other countries seems to be the only way they can bail themselves out. sooner or later these other countries are, hopefully, going to tell the USA to take a hike!

     

    reply to this | link to this | view in thread ]

  21.  
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    quawonk, Dec 17th, 2013 @ 4:51am

    Good. I think a couple of these big tech companies should go under as a warning to the others. You cooperate with authoritarian governments to fuck the people, the people will fuck you back! Choose the right side next time.

     

    reply to this | link to this | view in thread ]

  22.  
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    Rhozze (profile), Dec 17th, 2013 @ 5:47am

    Hope there will give good impact..
    Harga HP Terbaru Harga Tablet Terbaru

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    Anonymous Coward, Dec 17th, 2013 @ 9:23am

    Re:

    I assume by 'another' you're referencing corporate sovereignty but this is nothing like that. It seems like exactly the sort of thing shareholders should be able to sure over.

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    Anonymous Coward, Dec 17th, 2013 @ 9:25am

    Re: Re: The Federal Reserve undermining the country is far bigger.

    It's a defense mechanism. He pulls it it in cars like this one where corporation working the way it legally does might lead to a net positive for everyone.

     

    reply to this | link to this | view in thread ]

  25.  
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    btrussell (profile), Dec 17th, 2013 @ 9:28am

    "...according to various folks in Congress who have been briefed,..."

    Pretty much guaranteed that de-briefing was tried first.

     

    reply to this | link to this | view in thread ]

  26.  
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    Jay Are, Dec 17th, 2013 @ 10:32am

    okay, so if we know how the NSA thinks by now, then it should come as zero surprise when they respond to this calamity with something like:

    "This is even more reason to blame Snowden. Look what he's done, if we had been allowed just keep doing what we were doing clandestinely, all would be right with the world."

    Now we can say that we predicted it.

     

    reply to this | link to this | view in thread ]

  27.  
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    gorehound (profile), Dec 17th, 2013 @ 2:01pm

    Louisiana Sheriffs' Pension & Relief Fund !!!

    you got to laugh at this one bigtime ! Law Enforcement who would be the ones to break down your door are complaining but before their money felt threatened they said nothing at all.

     

    reply to this | link to this | view in thread ]


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