Politicians Aim to Ensure US Cloud Firms can Compete in Foreign Markets in Wake of NSA Scandal

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A letter from the “High Tech Caucus”, a bipartisan group of US House Representatives, is calling on US Trade Representative Michael Froman to make international data transmission a part of pending trade pacts with foreign nations.

After Edward Snowden revealed to the public many troubling details pertaining to the NSA’s PRISM program, many countries have expressed concern over evidence that US online service providers have been cooperating with US authorities in the collection of private data.

In countries with strict privacy laws, some service providers have taken to creating cloud services entirely based within their borders where they can better enforce local privacy laws and protect customers from surveillance. Examples include Swisscom’s planned Swiss cloud and Germany’s “Email Made in Germany”campaign that assured customers their email was subject to the protection of German privacy laws.

In an effort to restore trust in their services, many US service providers including AOL, Apple, Facebook, Google, Microsoft, and Yahoo have argued for limits on government surveillance for both foreign and domestic users. A recent industry campaign known as “Reform Government Surveillance” specifically proposes that worldwide governments should not require service providers to locate infrastructure within a country’s borders or operate locally.

Blocking off US cloud services or any other country, some argue, could lead to country-specific clouds and a balkanized cloud landscape. Jimmy Wales, the founder of crowd-sourced encyclopedia Wikipedia, has said that distrust in how online surveillance is conducted by US government agencies could embolden oppressive regimes to increase censorship. Distrust in foreign services causes many countries to take a more insular approach to their internet services, which, in many cases, means greater government involvement.

The High Tech Caucus letter, which was revealed to media this week, is asking Ambassador Froman to discourage what it calls “protectionist data flows” when negotiating the Trans-Pacific Partnership and other trade negotiations.

According to reports, the letter complains that the EU and Brazil have engaged in protectionism that undermine American companies’ ability to compete in the market-place.

The letter also reportedly says the Canadian federal government has included more “national security exemptions” in its Requests for Proposals requiring projects keep all or a portion of the data within Canada. It calls Canada’s use of “National Security” a thinly-veiled effort at protectionism.

According to Canadian privacy and technology lawyer David T.S. Fraser, there may be some unwarranted protectionism in Canada depending on the government body. He writes, “The Treasury Board of Canada has long-standing guidelines that require a risk assessment in every case that takes into account the sensitivity of the data and the risk of exposure, but Public Works appears to have adopted a one size fits all “no-can-do’ attitude.”

About the Author

David Hamilton is a Toronto-based technology journalist who has written for the National Post and other news outlets. He has covered the hosting industry internationally for the Web Host Industry Review with particular attention to innovative hosting solutions and the issues facing the industry. David is a graduate of Queen’s University and the Humber College School of Media Studies.

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