US Government's Failure To Protect Public Privacy Is Driving Business Overseas

from the all-for-what? dept

As we’ve covered over and over again, the US government has made it clear that it wants access to your data. With things like the FISA Amendments Act, ECPA and various other laws, law enforcement plays the FUD card repeatedly, insisting that it needs to be able to go in and see data to “protect” the public. There’s very little basis to make this claim. And, worse, by decimating online privacy, the US government may actively be driving business outside of the US to foreign countries that have stricter privacy laws that actually protect data from government snooping.

Many foreign companies are converging toward a common argument for why they’re better than their American competitors. It’s not that the foreign-made technology is better, more resilient, or more ubiquitous, nor that the foreign companies are more innovative or better managed. They compare not their businessmen but their politicians. They argue simply that American laws undermine any American product — that these laws fail to protect privacy of personal or business information of all users. This argument works partly because consumers claim to “avoid doing business” with companies they don’t trust to protect their privacy.

Basically, because law enforcement believes it needs to build a much bigger haystack as it searches for needles, we’re handing other countries a key selling point in setting up services to compete with US services: “you can’t trust any service based in the US, because it’s subject to government surveillance.” That may be a bit of an exaggeration, but I know I’ve see a number of companies lately who advertise the fact that they’re not based in the US to suggest that they’re more secure and can keep your data private. This is not the reputation the US needs or wants right now.

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Comments on “US Government's Failure To Protect Public Privacy Is Driving Business Overseas”

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Anonymous Coward says:

This is yet another example of the schizophrenic heart of America: the bizarre dichotomy between the “libertous” America and the “fearful” America, stretching right the way back tot he First Amendment.

At the moment, the fearful aspect is winning, and they have a right to be afraid, as the government is turning, inch-by-inch, into a corrupt parody of its earlier ideals. This is becoming more apparent in games such as Bioshock Infinite exploring this theme in the city of Columbia within the game (amongst other things).

Anonymous Coward says:

Re: Re:

“This is becoming more apparent in games such as Bioshock Infinite exploring this theme in the city of Columbia within the game (amongst other things).”

* rolls eyes *

If you want to see worldwide government corruption in action in a game, at least play a real man’s game: Deus Ex.

Anonymous Coward says:

Re: Re: Re:

Well, yes. But the fact that the US government (and other things) is becoming the bad guy because they’re running scared of the populace and is showing itself to be worse than those it’s supposedly combatting is completely unsurprising the anyone who’s ever studied history.

gorehound (profile) says:

Re: Re: Re: Re:

Pretty obvious tome that the Greedy Rich,Greedy Clueless World Leaders, and Greedy Clueless Politicians do not read History and if they even bothered to they spit on the past.

One day they all will get what they truly deserve !
Taken right out of History Books…………..The inevitable will happen this Century some time.
Greedbags better watch out cause you will not be treated nicely.

Anonymous Coward says:

Re: Re: Re:

The only claim I’m making is that Mike has no substantial basis to make his claim. Does he have inside access into the inner workings of law enforcement? No. Has he reviewed the case files and evidence? No. It’s just more mindless, government-bashing, idiotic FUD. Mike’s specialty–and his flock gobble it up. The irony of him claiming the government has very little basis to make its claim is priceless.

Rikuo (profile) says:

Re: Re: Re:3 Re:

I’m going to use logic here. Let’s see if you can keep up.

You said that Mike DOESN’T review court documents. He does. All the time.

Now, Mike is using logic here, a thought process where he determines that if Person A is doing Action B, then more than likely, it will lead to Result C. He sees the actions the US government has taken (censorship, ignoring FOIA requests, demanding access to data (Skype et al)) and quite reasonably thought out a result: companies that want to retain customers (customers who DO NOT WANT governments having access to their data) will move overseas. Mike figures this out by reviewing all the data that is available.
Now, if Mike is somehow wrong and the US government is actually planning something benign with all of this, then Mike is NOT at fault for coming to the wrong conclusion. He was given inaccurate data.

tqk says:

Re: Re: Re:

Simply going “give us all the information you have” means you have even more information to go through to find whatever you’re looking for, no matter how it is organized.

That’s not how it’s done these days. Now, it’s slurp down all the data, then mine it at your leisure. The NSA even uses this to get around your Fourth (?) Amendment; as long as they haven’t looked at it yet, they haven’t really received it.

Anonymous Coward says:

Things like the Megaupload case didn’t help things, either. I’ve gotten wind of more than a few companies that are arranging to move all of their infrastructure and personnel out of the US as soon as feasibly possible. And a few other small startups whose founders chose to move out of the US, gain citizenship in another country, and drop their US citizenship entirely before even starting operations.

In the current US administration, they just don’t want to take the chance that some politician will order a hit on them as a favor to one of his buddies. Better to set up shop where there’s a little more separation between corporation and state.

out_of_the_blue says:

"This is not the reputation the US needs or wants right now."

Mike’s last line is often key, and as usual this time is just plain ODD. — It’s FACT that the criminals running US gov’t are working on doing away with privacy entirely, and in open conspiracy with Google and Facebook. — SO, by worrying about “reputation” does Mike just not want the TRUTH out? Hmm. — Of course, you fanboys will dismiss this as mere lousy phrasing plus my excess of doubt, but there it is.

“This argument works partly because consumers claim to ?avoid doing business? with companies they don?t trust to protect their privacy.” — EXACTLY. Hence Google’s alleged “don’t be evil” motto; given its massive ability to track and collate (900,000 servers on giant farms), its first goal is to appear open and friendly, giving away helpful “free” services, but not identifying individuals.

Rikuo (profile) says:

Re: "This is not the reputation the US needs or wants right now."

I looked up ODD and here’s what I found

“The child must exhibit 4 out of the 8 signs and symptoms listed below in order to meet the DSM-IV-TR diagnostic threshold for oppositional defiant disorder[8]

Actively refuses to comply with majority’s requests or consensus-supported rules[9]

Performs actions to deliberately annoy others[9]

Angry and resentful of others[7]

Argues often[7]

Blames others for his or her own mistakes[10]

Often loses temper[10]

Spiteful or seeks revenge[10]

Touchy or easily annoyed[10]

All of that can be applied to you.

Violated (profile) says:


I have been saying for years that people should keep their businesses away from the US in terms of US hosting (and even domains) when the US likes to define its territory.

If you are on claimed US land then you are under US law and then there resides no data that they wont poke their nose through.

Companies have an obligation to protect their customer privacy and the US Administration likes to misuse the law in that they can spy on everyone and everything without even bothering to get a Court Order.

So I only await that one big case that makes this all painfully obvious to everyone. The General Petraeus case comes close on that one being a total privacy violation when no law was broken.

Suzanne Lainson (profile) says:

Maybe it's a good cover for tax avoidance

Companies are moving elsewhere to avoid paying US taxes. Maybe privacy issues are a cover for that.

I think private companies totally pull the strings on what the government does with data. There are contracts to sell to government.

So if we don’t want government poking around in private data, we might start with what data private companies collect, how private company funding influences politics, and so on.

Let’s follow the money.

Suzanne Lainson (profile) says:

Re: Re: Maybe it's a good cover for tax avoidance

Why decide that taxes are paid poorly when the regulation of them had been shoddy as well?

Well, yes. I’d prefer a total overhaul of the US tax system. And I advocate for lots of reform all across the government and economic system.

One reason I think we have to look at things differently now is that there are massive environmental impacts that we can’t run away from. In the past, if people screwed up one area, they could move to another. Now that we are so interconnected, we’ve got to find solutions that require some level of cooperation or we need to find solutions that work even when people’s poor decisions don’t contribute to the common good.

Anonymous Coward says:

it’s not just the failure to protect public privacy but the willingness to open up that privacy to, of all industries, the USA entertainment industries! giving them ‘carte blanche’ to inspect anything and everything to with people’s lives is a complete piss take! having the government able to do it is bad enough, akin to a mixture of Fascism and Communism, but a freakin’ third party? one that is going to accuse people of wrong doing, even when there is none, simply because those people cant afford to defend themselves! Jeez! how ridiculous can it get?? then add on the fact that the USA are running industries abroad, where costs are miniscule in relation to those at home, but then want local people to pay the inflated prices of the USA, and you get the answer to countries not wanting anything to do with the USA. the entertainment industries started this crap and the USA government not only went along with them but encouraged them. now, hopefully, it is coming back to bite them seriously hard in the arse!!

colin (profile) says:

I moved

I moved all my domains and my domain hosting business off US based servers. The increasing paranoia by US Government/Law enforcement and entertainment industries turned me off.
One of the domains I host and operate is for an annual music festival and the chance of it being taken down for some bullshit reason was not worth the limited advantage of using US based servers.
Having said all that, things are not going a lot better here in Canada under the current government. 🙁

Rob says:

also moved.

My VPS, Cloud hosting, webhosting, file hosting, all of it is now non American. It’s too bad because being in Canada I would much rather give my money to US companies, however if I cant count on the American government to protect privacy then I cannot trust American servers, going further I also cannot trust any US registered business even if they host on servers in other parts of the world.

Internet Zen Master (profile) says:

Gee, I wonder why

As said above: Megaupload says hi.

And it doesn’t help that some companies are bending over backwards to provide governments with customer’s data.

Case in point, companies state in their FUCKING TERMS OF SERVICE that they have the the right to scan content uploaded to their cloud backup service for things like child porn. This is part of their privacy policy.

Exhibit A: Verizon.

Verizon reserves the right to access your Storage Service account at any time with or without prior notice to you and to disable access to or remove content which in our sole discretion is or reasonably could be deemed unlawful… Verizon is required by law to report any facts or circumstances reported to us or that we discover from which it appears there may be a violation of the child pornography laws. We reserve the right to report any such information, including the identity of users, account information, images and other facts to law enforcement personnel.”

The fact that the terms & conditions of the cloud backup service, which most people assume are private, explicitly allowing them to scan the stuff you upload to their cloud for things you shouldn’t have legally (see: child porn), kinda files in the face of basic idea of privacy.

[the info about Verizon this sort of thing popped up early last month on Ars: ]

So yeah, no surprise that companies have started moving overseas. If some companies/the US government are barely attempting to pay lipservice to the concept of privacy anymore, then companies are going to want to move to places that have more respect for privacy.

How long before Congress gets the memo that they’re hurting their economy by driving businesses overseas by letting the FBI et al do surveillance for extremely vague “security reasons”?

The Zen Master says, “We’ll see.”

Suzanne Lainson (profile) says:

Re: Gee, I wonder why

If some companies/the US government are barely attempting to pay lipservice to the concept of privacy anymore, then companies are going to want to move to places that have more respect for privacy.

But some countries have much stricter privacy laws than the US. They have laws that limit what companies can collect and monitor in the first place.

What I complain about are companies that want to collect all the data they want and to sell it to whomever they want, but then they yell “privacy” about the government. They don’t really believe in privacy because they are making money by invading it. It’s a double standard for profit.

Suzanne Lainson (profile) says:

Make privacy the default standard

If companies are really concerned about privacy, engineer everything so that no data is collected and that people have to opt-in for it to be collected. Let Facebook, Google, cellphone companies, etc. operate without saving data and especially without data identifiable to individual people. They won’t, of course.

Usually the argument goes that if you don’t want to be monitored, don’t use these services. But how about we change the nature of online usage so that no monitoring happens in the first place? Now, wouldn’t that be revolutionary?

Ultimately we’re either going toward a world where everything is viewable by everyone and there will be no need for government to be singled out because they will have the same access as everyone else. Or we’ll find ways to live our lives as anonymously as possible and everything will be engineered to hide whatever we don’t want known.

Anonymous Coward says:

“you can’t trust any service based in the US, because it’s subject to government surveillance.”

No, this is not exaggeration. Since the Patriot Act it is a recurring theme in IT circles around here that the main argument against going into the cloud with any business related data is: you cannot avoid US companies with absolute certainty, and any involvement of a US company compromises data security because of the US laws.

It is THE main reason to avoid the cloud in anything business related. To be able to contractually provide that no US based company will be involved is not a mere competetive advantage, it is the prerequisite to be allowed to even compete at all.

Bryan says:

What I don’t understand is why this is such a surprise especially with everything that come to light during the Bush administration. We have know for years that the things we do on the web is not as safe and secure as we had hoped it would be. Even back in the late 90’s there were multiple reports of people doing a Google search on how to make a pipe bomb and then were completely “surprised” when the authorities showed up at their door step. We have known for years that our IP addresses are sometimes dynamic,(where it changes slightly every time you log in) and other times the IP address are static,(it does not change) making hackers/governmental officials around the world very happy. If “Joe Blow” can determine your location using geotracking and a photo posted on facebook, then why would the government use the same basic technology to track what is going on around country/world?

Ess, C. (2010). Digital media ethics. Polity Pr.

Suzanne Lainson (profile) says:

Re: Re:

If “Joe Blow” can determine your location using geotracking and a photo posted on facebook, then why would the government use the same basic technology to track what is going on around country/world?

Exactly. Why would anyone assume that governments wouldn’t use the same tools available to everyone else? The more sophisticated technology gets, the more sophisticated government tracking gets (or should get — I’m not sure governments are as up to speed as private companies are).

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