Leading VC: NSA's Activities Are 'Corroding Silicon Valley'

from the a-question-of-trust dept

Techdirt has already run a couple of stories about the longer-term damage the recently-revealed activities of the NSA are likely to have on the US computer industry. Bloomberg is reporting on how the growing distrust of US services is taking a new form:

Some companies are apparently so concerned about the NSA snooping on their data that they're requiring -- in writing -- that their technology suppliers store their data outside the U.S.

In Canada, a pharmaceutical company and government agency have now both added language to that effect to their contracts with suppliers, as did a grocery chain in the U.K., according to J.J. Thompson, chief executive officer of Rook Consulting, an Indianapolis, Indiana-based security-consulting firm. He declined to name the companies, which are using Rook to manage the segmentation and keep the data out of the U.S.
Significantly, that was before Der Spiegel detailed the incredible range of backdoors and vulnerabilities that the NSA is able to exploit in key software and hardware. As well as being terrible news for our privacy and freedom, this is likely to have huge knock-on consequences for the US computer and communications industries. Even though many of the companies named in the Der Spiegel piece have been quick to deny that they had any knowledge of the backdoors, their products are now inevitably tainted by the suspicion that they are compromised, and therefore cannot be trusted.

Some worry that the damage runs even deeper than a few tarnished brands. For example, the well-respected investor Michael Dearing has written an excellent post expressing his fears that:

the NSA's version of patriotism is corroding Silicon Valley. Integrity of our products, creative freedom of talented people, and trust with our users are the casualties. The dolphin in the tuna net is us -- our industry, our work, and the social fabric of our community.
As he explains:
Billions of people let Silicon Valley into their daily lives and they hug it close. They trust our products to find information, to get work done, to talk to each other, to buy and sell stuff, and to have fun. That trust is a decades-old endowment built up by inventor-founders from Robert Noyce and Gordon Moore through to the present day. The magic of compound growth works in our favor when trust is accumulating. But now we are making trust withdrawals every day as people around the world learn how the NSA has woven surveillance, search, and seizure into and around our products. This is the painful flip side of compound growth: the trust withdrawals compound too.

Silicon Valley's promise to people is simple and compelling: "We'll build a bunch of things. Try our work; keep what you love, dump what you don't love. We'll learn from it and build on the stuff that you like best." Sadly, the NSA undermines the promise at its foundation.
What that means is that the true cost of the NSA's reckless and illegal attempts to "collect it all" and "get the ungettable" may turn out to be not "just" tens or even hundreds of billions of dollars in lost business, but the far more serious loss of trust in Silicon Valley itself.

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Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    silverscarcat (profile), Jan 6th, 2014 @ 6:18am

    Obligatory

    Thanks Obama/Bush/Clinton/NSA!

     

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

  2.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 8:06am

    Re: Obligatory

    send your thanks rather to their primary campaign "donators". mostly the same companies on all of their contributor lists.

    They are all corrupt as shit, bought and paid for, they only do as they are told by their owners.

     

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

  3.  
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    scotts13 (profile), Jan 6th, 2014 @ 8:08am

    I'm sure there are XXXX people (how many workers does the NSA employ?) out there gritting their teeth, as we've got it all wrong: It's not the spying, it's that people know about it. Edward Snowden is single-handedly eroding Silicon Valley!

     

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

  4.  
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    TasMot (profile), Jan 6th, 2014 @ 8:08am

    But, but, but, you have NOTHING TO FEAR if you are not doing anything wrong...... They told us so.

     

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  5.  
    identicon
    S. T. Stone, Jan 6th, 2014 @ 8:09am

    Well, it'll all be worth it to the MPAA if this ends up killing Netflix and really, isn't that the important thing to think about here?

     

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

  6.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 8:18am

    What if those Silicon Valley companies stopped selling their products to the NSA? I'm betting all the orders from the NSA don't make up for lost revenue from elsewhere...

     

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  7.  
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    me@me.net, Jan 6th, 2014 @ 8:22am

    Snowdens the traitor.....

    yet the NSA is damaging the economy, hmmmmmm

     

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  8.  
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    Anonymous Coward, Jan 6th, 2014 @ 8:43am

    Yes, clean up the NSA's "digital detritus". Of course, that does nothing about what almost certainly has been inserted by the intelligence services of every other developed nation.

     

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

  9.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 8:45am

    Re: Re: Obligatory

    Taking it out on (most) of the donors isn't really the answer either.

    If we have presidents from both parties (Bush, Obama, and maybe even earlier presidents) doing the exact same thing, then what option do us against the NSA's illegal spying have in a 2 party system?

    This is why lately I've fallen in love with parliamentary systems and wish the US would ditch congress and switch to a parliament, and also elect presidents like nations with a parliament do (with runoff elections).

     

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

  10.  
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    UnOranged, Jan 6th, 2014 @ 8:46am

    You would think Michael Dearing's post/site would at least offer a better https option for those that want it. Here is what happens in FF when using https:

    www.harrisonmetal.com uses an invalid security certificate. The certificate is only valid for the following names: *.bluehost.com , bluehost.com (Error code: ssl_error_bad_cert_domain)

    Hummm.

     

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

  11.  
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    DannyB (profile), Jan 6th, 2014 @ 8:54am

    Re:

    The problem with that is, how are you to know that you are really selling it to the NSA?

    How many fake names, companies, small offices, and shell companies do you think the NSA or other spy agencies have?

     

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

  12.  
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    DannyB (profile), Jan 6th, 2014 @ 8:56am

    Cost benefit analysis

    Yes, the NSA may be destroying the economy, but the NSA's budget (not even counting other agencies') is far higher than the damage caused by 9/11. So there.

     

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

  13.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 9:07am

    Re: Re: Re: Obligatory

    The problem is not solved by changing the details of the electoral system. It requires changing the people that stand for election, probably by dismantling the party system.

     

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

  14.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 9:42am

    I don't like logging into Linkedin or Gmail anymore. I'm afraid I might be Quantum inserted, and I don't like the sound of that.

    I feel like my cellphone's main function is to provide someone with a log of everyone I know, and everywhere I go. I'm concerned the microphone on my phone, or anyone's phone, might be turned on and recording the conversations of everyone in the room.

     

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

  15.  
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    Charles (profile), Jan 6th, 2014 @ 10:22am

    Re: Re:

    Your reply reminded me of the time I hired a handyman to look in my attic at an electric rooftop vent. I went with him to look. He told me the manufacturer was a front for the CIA. He was ex-military.

    I have know idea if what he said was true, but he said it.

    Cheers.

     

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  16.  
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    Charles (profile), Jan 6th, 2014 @ 10:24am

    Re:

    Just because you're paranoid, doesn't mean they are not after you. :-)

     

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

  17.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 10:31am

    "The dolphin in the tuna net is us"
    And the terrorists are minnows...

     

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

  18.  
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    Anonymous Coward, Jan 6th, 2014 @ 11:02am

    Re: Re:

    Probably more a question of subcontractors of subcontractors of contractors of NSA doing the trading.

    It is very hard to find a company 3 steps out that doesn't have an indirect connection to NSA, so fake positives would make finding out if you are trading with NSA completely impossible...

    It is thick irony for NSAs metadata minimisation system!

     

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

  19.  
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    Anonymous Anonymous Coward, Jan 6th, 2014 @ 11:36am

    Re: Re: Re: Re: Obligatory

    Here here! Along with taking the money out of politics (nobody can buy a political ad except the electorate sanctioned candidates with government provided credits that the government can negotiate with media) this will go a long way to cleaning up the political system in the US.

     

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

  20.  
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    Krish (profile), Jan 6th, 2014 @ 12:24pm

    Let's not pretend (like Michael Dearing seems to be doing) that everything was hunky-dory in the "social fabric" of Silicon Valley before the NSA got involved.

     

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

  21.  
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    Aerilus, Jan 6th, 2014 @ 2:16pm

    These people realize the premise of the internet is that everything is connected right? it doesn't matter where the data is as long as its plugged into the internet it is reachable by the nsa.

     

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

  22.  
    identicon
    Anonymous Coward, Jan 6th, 2014 @ 2:41pm

    Re:

    It is a good point. Security has always been a joke in the most used software.

    Maybe we should thank NSA for, maybe inadvertently, exposing the all but safe systems in current generation software?

    As long as they operate under the same conditions as hackers, I see no problem with their methods (You as a computer user should have used better software and the software developer should have fixed vulnerabilities faster etc. If you can keep out hackers, you can keep out NSA and vice versa).

    The problems arise as soon as they actively promote extra holes or vulnerabilities, abuse more or less purposeful legal holes to minimize their minimization procedures or use companies as spies for gathering intel in friendly cooperating countries. Those abuses are the real problem.

     

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

  23.  
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    John Fenderson (profile), Jan 6th, 2014 @ 2:43pm

    Re: Re:

    As long as they operate under the same conditions as hackers, I see no problem with their methods


    I totally agree, as one of those conditions is "go to jail when you get caught".

     

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

  24.  
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    Feldie47 (profile), Jan 6th, 2014 @ 2:50pm

    Think this is a problem? What if they finally manage to break RSA encryption? Who will bank online, buy online, or trade stocks online then? The whole internet economy (read 'BIG')is based on the belief that RSA is currently unbreakable.

     

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

  25.  
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    John Fenderson (profile), Jan 6th, 2014 @ 3:16pm

    Re:

    Who will bank online, buy online, or trade stocks online then?


    Most people will. Never underestimate the power of denial.

    The real issue is what businesses would be willing to take the risk of offering such services?

     

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

  26.  
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    Feldie47 (profile), Jan 6th, 2014 @ 5:12pm

    At that point we would have an actual broken internet. Almost inconceivable, yet truly worrisome.

     

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

  27.  
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    amjugle2014 (profile), Jan 6th, 2014 @ 7:05pm

    how many workers does the NSA employ

     

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

  28.  
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    McCrea (profile), Jan 7th, 2014 @ 4:43am

    Re:

    666

     

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

  29.  
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    btr1701 (profile), Jan 7th, 2014 @ 2:52pm

    Backwards?

    Not sure I get why these companies and government think that putting a requirement for data storage outside the US is any kind of solution.

    The only restriction on collection that the NSA has even acknowledged to exist-- in theory, if not in practice-- is that collection/spying on purely domestic data exchanges is not allowed. If it's on foreign soil or in transit outside the borders of the US, it's open season as far as the NSA is concerned.

    Requiring data to be stored where the NSA feels it has no restrictions whatsoever as opposed to the one place it at least claims it's not allowed to spy seems kinda backward to me.

     

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


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