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NSA leak threatens Web giants

For Facebook and Google, giving user data to the U.S. could hurt global growth.

June 15, 2013|Jessica Guynn
  • At a Google data center in Oregon, Denise Harwood diagnoses an overheated computer processor. Google uses these data centers to store email, photos, video, calendar entries and other information from its users.
At a Google data center in Oregon, Denise Harwood diagnoses an overheated… (Connie Zhou, Google )

SAN FRANCISCO — Facebook Inc. and Google Inc. want people the world over to trust them with the most intimate details of their lives.

Now both Silicon Valley companies are fighting to preserve that trust in the wake of damaging revelations that they turned over users' data to the National Security Agency's secret Internet surveillance program.

Facebook and Google each vigorously deny they gave the U.S. government special access to their servers or complied with broad requests for users' information and communications. And they have moved swiftly to quell criticism overseas, exerting public pressure on the Obama administration to shed light on the number and scope of national security requests they get under the Foreign Intelligence Surveillance Act, or FISA.

But many say the revelations have already undermined the companies' sweeping international ambitions in the very same countries where they are looking to put down deeper roots.

"The implications are not just about what happens to the privacy of Americans and to the future of American political due process," said David Kirkpatrick, author of "The Facebook Effect." "There are potentially vast negative global consequences."

Rebecca MacKinnon, senior research fellow with the New America Foundation, says there is a growing sense of outrage around the world. U.S. technology firms tied to the NSA surveillance program are especially vulnerable in places where citizens live under the oppression of pervasive surveillance and distrust of government runs deep, she said.

The NSA program, dubbed PRISM, targets foreigners whose online activity is routed through the United States.

"There has been a lot of discussion about Americans' privacy rights. But what about the privacy rights of everyone else?" said MacKinnon, who examines the effects of digital technologies on human rights.

More than any two other companies in recent years, Google and Facebook have come to rule the global Internet.

Google dominates online search in most of the world, with its market share in Europe exceeding 90%. The technology giant is aiming to extend its geographic reach, setting its sights on the developing world: It's preparing to fund and develop wireless networks in emerging markets in sub-Saharan Africa and Southeast Asia to bring Internet connections to people who live outside major cities.

Facebook has more than 1 billion users worldwide, 8 in 10 of whom are outside the U.S. With most major markets already saturated and growth stagnating in the U.S. and Europe, Facebook's future depends on adding billions of users in the developing world, where people may have greater qualms about a foreign government secretly having unfettered access to their accounts.

"It's an existential threat to these companies," technology investor and blogger Michael Arrington said. "The stink of being a pawn of the U.S. government could really hurt."

Much of the PRISM program is shrouded in secrecy, and the extent of the companies' involvement is unknown. National security agencies bar companies from even acknowledging that they have received a FISA request.

If people around the world begin to regard these services with suspicion or even fear, that could idle overseas growth and swing open the door to foreign competitors, Arrington said.

"It makes it easier for companies that are not in the U.S. to say, 'We will never respond to U.S. FISA orders,'" he said.

Google and Facebook say they routinely push back on government requests, to minimize how much information they must release. Facebook is in discussions with the federal government to allow it to disclose FISA requests, a person familiar with the situation said.

Google is also negotiating with the government to be able to disclose to users the number and scope of national security requests, including FISA requests, a person familiar with the situation said.

The people were not authorized to speak publicly about the matter.

Although they collect massive amounts of information on their users to power their advertising businesses, Facebook and Google are known for resisting sharing that information with the government. Each has libertarian values baked into their corporate cultures.

But because of the secrecy surrounding FISA requests, it is impossible to know to what extent the companies are cooperating, observers say.

"There are a lot of misimpressions that are out there," Google's chief legal officer, David Drummond, said this week in an interview on British television.

For years, both companies have come under heavy scrutiny for how they handle the vast amounts of personal information they store on their servers. Many users strike an uneasy bargain: They hand over their personal data in exchange for free services.

Yet that calculus could quickly change -- especially outside the United States -- if the companies cannot give some assurances that users' personal communications are safe from the prying eyes of the U.S. intelligence agencies, MacKinnon said.

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