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.

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Companies: ibm

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Comments on “IBM Sued By Shareholders For Cooperating With The NSA… Decimating Sales In China”

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Anonymous Coward says:

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.

Mike Masnick (profile) says:

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.

out_of_the_blue says:

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.


Anonymous Coward says:

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!

Jay Are says:

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.

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