One Year Later, NSA Scandal Has Cost Tech Companies Billions

One year after his first revelation, Edward Snowden’s actions are still on the minds of many Americans, including tech executives who think the NSA controversy has harmed their business.

Executives from leading companies such as Netflix, Google and Facebook met with senior White House officials in December, and in March. The Obama administration made it look like these meetings had helped to resolve issues on intelligence reforms. However, venture capitalist Marc Andreessen argued that the meetings were “mostly for show and have produced not even a little progress on privacy and surveillance issues.”

Andreessen went on to say, “The level of trust in U.S. companies has been seriously damaged, especially but not exclusively outside the United States. Every time a new shoe drops — and there are 10,000 of them — it serves a blow to the U.S.

Some estimates suggest the news about the NSA’s surveillance practices will end up costing tech companies tens of billions of dollars in lost revenue. A senior analyst at the Information Technology and Innovation Foundation, Daniel Castro, predicted that the United States cloud computing industry could lose $35 billion by 2016. He said, “It’s clear to every single tech company that this is affecting their bottom line.”

Deputy general counsel at Microsoft, John E. Frank, said, “We’re hearing from customers, especially global enterprise customers, that they care more than ever about where their content is stored and how it is used and secured.

While Obama announced in January that there would be a series of proposed changes to the NSA’s surveillance practices, such as requiring the spy agency to seek permission from the Foreign Intelligence Surveillance Court every time it wants to investigate U.S. phone records, it was Congress that voted recently to allow companies to talk more openly about the data requests they receive from the government.

The White House may wish that tech companies will eventually forget about the whole thing, but according to Andreessen, “the view from Silicon Valley is that the White House hung the NSA out to dry.