(Page 2 of 3)
The battle pits U.S. national security agencies against an industry that has been a bright spot in the country's dreary economy. More than $1.3 trillion in shareholder wealth is tied up in Apple, Google, Microsoft, Facebook and Yahoo alone, and the companies collectively employ more than 243,000 people.
In a study for his think tank, Castro predicted that the U.S. government's online surveillance will take away up to $35 billion in revenue from U.S. technology companies that host services over the Internet and sell remote data storage _ a concept broadly known as "cloud computing." The estimate, which covers the next three years, is based on the assumption that many companies outside the U.S. will buy services in other countries rather than risk copies of their data being turned over to the U.S. government. The prediction doesn't include possible losses in online ad revenue.
Without quantifying the company's potential losses, a Google lawyer recently told a Senate subcommittee that the government's online espionage could have "severe unintended consequences," including increased business costs, less data security and alienated Web surfers.
"The impact on U.S. companies, and the broader U.S. economy, could be significant," said Richard Salgado, Google's director of law enforcement and information security, during a Nov. 13 appearance before the Senate Judiciary Subcommittee on Privacy, Technology and the Law.
In a worst case scenario, Forrester's James Staten initially theorized that global cloud computing services could lose as much as $180 billion over the next three years. That dire figure has been widely circulated by media outlets, but Staten told The Associated Press he now believes chances are remote that losses will surpass $20 billion. That's because he believes most companies around the world are already encrypting the vital information they store on the computers of outside vendors.
"The reality is no enterprise is going to be naive," Staten says.
Wary of the U.S. government's electronic espionage, Brazilian President Dilma Rousseff ordered a series of measures aimed at greater online independence and security for a country that boasts Latin America's largest economy. Other countries and international regulators are considering strict rules for data-handling by U.S. tech companies. If that were to happen, it could cripple the companies' drive to grow in overseas markets, and could fracture the Internet's seamless inner-workings. (continued...)
© 2014 Associated Press/AP Online under contract with YellowBrix. All rights reserved.