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Spying for the NSA Is Bad for U.S. Business

An anti-government protester sits near an Internet tent in Sana, Yemen, after clashes with pro-government supporters in 2011

Photograph by Jonathan Saruk/Getty Images

An anti-government protester sits near an Internet tent in Sana, Yemen, after clashes with pro-government supporters in 2011

The U.S. National Security Agency has dealt a blow to Google (GOOG), Facebook (FB), Microsoft (MSFT), and other U.S. corporations. In addition to forcing them to engage in the Prism spy program, the NSA limits disclosures about their involvement, making it difficult for these companies to defend their reputations.

While we all want to catch terrorists, forcing businesses to violate tens of thousands of customer relationships is not a good way to do this.

Integrity is the most important asset of any successful business. For Internet companies such as Google, Facebook and Yahoo! (YHOO) that handle sensitive personal data, this means maintaining transparency and protecting user privacy.

Most U.S. citizens may not object to government officials reading their e-mails or postings to try to catch terrorists. However, Google and Facebook both have big international businesses, and it is unlikely that law-abiding users in Dubai, Hong Kong, or Europe will find a cozy relationship with a U.S. intelligence agency as comforting.

The Prism revelations will clearly cost U.S. companies some business overseas. International competitors of Google and Facebook—which have generally been far behind them in technology and user acquisition—will surely try to paint them as pawns of the “Big Brother” U.S. government. Some competitors include Sina (SINA) and Baidu (BIDU) in China; Yandex (YNDX) in Russia; Foundem, Badoo, and Twenga in Europe; and Mixi (2121:JP) and Mobage (2432:JP) in Japan.

The irony is that Google, Facebook, and Twitter have been powerful forces in helping to bring democracy and freedom to many parts of the world. In 2009 dissidents in Moldova used Twitter to organize an uprising that challenged an unfair election in what has become known as the “Twitter Revolution.” A similar uprising took place in Tunisia in 2011, using Facebook.

The independence of these global U.S. companies is critical to their operations. If people in these countries believe that the companies are controlled by the U.S. government or spying for the U.S., it will render them ineffective.

Three years ago, Google pulled out of China because the Chinese government hacked the Gmail accounts of Chinese dissidents. In retaliation—and to protect its integrity—Google walked away from the entire Chinese market, one that is potentially four times the size of the U.S. market. If Google had been a Chinese company such as Baidu, it never would have been able to react to or publicize this situation.

In the U.S., Google, Facebook, and other American companies have no recourse concerning government requests. The U.S. government can grab data from Google computers as much as it wants; Google can’t make a peep publicly because if it does, it will be leaking “classified information.”

Google says it doesn’t give in to every U.S. government request for user information. In reality, the company is relatively powerless in this regard. The Foreign Intelligence Surveillance Court allows companies to challenge NSA requests. But at an FISC hearing, the government doesn’t need to show evidence of probable cause, as in a criminal case—just evidence that the surveillance target is a foreign power or an agent of one. Since this court was established in 1979, it has overturned only 11 surveillance requests—just .03 percent of all cases.

While we all want to catch the bad guys, there has to be a better way to do it than turning U.S. corporations into aiders and abettors of U.S. espionage efforts. The Cold War was not won because the U.S. had more weapons—or better spies—than the Soviet Union, but because our economy and our products were the envy of the world. The U.S. is the world’s leading superpower because we have strong companies that operate free from government interference around the world.

For the sake of our country—and democracy around the world—we need to keep U.S. companies strong and independent. If the NSA continues to exert its will, forcing them to be accomplices in covert operations, global democracy will suffer.

Larry Popelka is founder and chief executive officer of GameChanger, an innovation consulting firm.

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