Bugging Out

The NSA’s surveillance program is starting to roil some of the world’s biggest companies

November 6, 2013
November 6, 2013

The recent revelations about the US National Security Agency’s vast surveillance program have shocked US citizens, upset privacy advocates and enflamed diplomatic tensions between the US and numerous foreign countries. Now there are signs of unease among the world’s biggest companies. The anxiety isn’t confined to the giants of Silicon Valley, who have leveled F-bombs at the government for alleged illegal hacks on their infrastructure. Here’s how NSA meddling has featured in corporate conference calls throughout the latest earnings season:

  • Mastercard CEO Ajaypal Singh Banga described the NSA’s surveillance as a “much deeper discussion, way beyond just us” but acknowledged the issue was beginning to be talked about by overseas customers. “I think the longer, bigger term issue for a lot of global companies is that if the fears about privacy go to a point where people would attempt to find ways to have more localization.” In other words, merchants might want their transactions processed through servers on home soil, rather than through the credit card giant’s facility in St Louis. “That certainly impacts the way that you construct your business model over time,” he said, according to a transcript of the company’s October 31 earnings call. He said the company was already processing 80% of overseas transactions in the countries where they take place.
  • The NSA scandal has also been a hot topic for the clients of internet content delivery company Akamai Technologies, according to CEO Frank Leighton following the company’s earnings on October 23. “There is concern outside of North America that a US company would be prone to giving over sensitive information to the US government as a result of the [NSA's] PRISM disclosures. Fortunately for us, most of that activity is stuff that doesn’t really relate to our business. So it has come up, but we’re not really in the focus of that storm. Probably Germany is a place where it’s been most a topic of conversation.”
  • In Germany, Volkswagen CFO Dieter Pötsch acknowledged on October 30 that the company was concerned about the dangers of corporate espionage by state surveillance agencies: “Of course, we are concerned and we have been concerned since quite a while, and there are significant measures which have been taken by the company, but as you certainly will accept, it’s nothing which somebody wants to talk about,” he said.
  • Technology solutions provider Man Tech International group, whose biggest customer is the NSA, is keeping an eye on things, but for different reasons. It noted on October 30 that it’s expecting the debate about the agency’s ability to collect information on US citizens to continue to rage on in Congress. “We will continue to monitor these activities, but I expect that the cyber and intelligence markets will continue to be strong and that ManTech will be a leader in these markets,” president and COO L William Varner said.

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