Exploring the Effect of NSA Disclosures on the U.S. Technology Industry

This past Monday, I had the honor of moderating a panel organized by students at the American University Washington College of Law’s National Security Law Brief, on Understanding the Global Implications of the NSA Disclosures on the U.S. Technology Industry. The panel (Elizabeth Banker (ZwillGen), David Fagan (Covington), Joseph Moreno (Cadwalader), Gerard Stegmaier (Wilson Sonsoni) and Lawrence Greenberg (Motley Fool)) was stacked with practitioners who are navigating, on a daily basis, issues related to data privacy, transparency, and cooperation with law enforcement/government requests, among other related issues. As we explored during the discussion, there are a number of recent media and other reports describing the “fallout” for U.S. industry as a result of the disclosures. So, at least two questions arise: first, are the reports to be believed, and second, if so, will there be a lasting impact, or is this only temporary? The short answer is that it is too soon to judge. But, as we all read these reports, such as this one produced by NTT Communications and cited in a Guardian article late last month, it will be important to look at the source and potential motivations behind them before drawing firm conclusions about the state of U.S. industry. Of interest, several of the panelists suggested that the reactions to the recent disclosures perhaps represent the tipping point of what was already a growing discomfort with, if not outright opposition to, changes to the law in the national security area since the USA Patriot Act of October 2001. Another panelist noted that despite the reports of dramatic effects, stock prices of certain affected U.S. technology companies have gone up in recent months (while some others have gone down). It is an important point: drawing conclusions about the long term effects on U.S. industry will take careful study, over a sustained period of time. In the meantime, I intend to spend more time looking into this issue. It seems to me that, given that foreign intelligence surveillance activities conducted by the United States are subject to more laws, rules, procedures and oversight than any other nation, the rush – if there is one – to displace U.S. companies, may be misguided. There just may be a different story to tell.