‘Atmospheric Effect’

Prism Program Raises Questions About Trust, Value of U.S. Companies in Digital Trade Agreements, Experts Say

July 25, 2013 by Sara Friedman|Top News

The Prism program could change people’s perceptions on how their data is used, said Joshua Meltzer, Brookings Institution fellow. “Surveillance relies on the free flow of information and the perception issue seen in terms of branding and trust,” said Meltzer. “People might start switching to non-U.S. search engines.” The way the media reported the surveillance leaks will have some impact on U.S. businesses and trade in the short term, said Jake Colvin, National Foreign Trade Council vice president. “If you read what the companies directly associated with Prism have maintained, they have complied with lawful demands subject to search warrant or court order in the United States and elsewhere,” said Colvin. “They do not provide backdoors or provide encryption keys or otherwise permit direct access to their services. There has been a heavy suggestion that this program is limited, certainly more than initial reports have suggested.”

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The Prism program will have large repercussions on digital trade, in terms of trust and competition for U.S. companies, said panelists at an Information Technology Innovation Foundation (ITIF) event Wednesday. While the Prism disclosures may not have added “anything of substance” to the current discussion, they have a “significant atmospheric effect,” said Phil Verveer, former State Department coordinator for international communications and information policy. Verveer and others mentioned the letter by Internet companies and other advocates asking for permission to disclose records requests they get from the government (CD July 19 p11). “There’s a lack of information on how often the government has access to these records from companies,” said Verveer.

Foreign officials and foreign companies are taking advantage of the current situation in the U.S., said Colvin. “Foreign companies are using Prism in the latest of a series of clubs to beat U.S. firms over the head,” he said. “They have a history of doing this and they used the Patriot Act as one of those clubs prior to Prism. They have a long history of using export controls as a reason to pick European companies over a U.S. company, for example.” The Prism program could prevent the European Privacy Directive from creating compatible privacy arrangements to the U.S. since they're at the end of their process, said Verveer. “In the near term, Prism activities have been damaging to our efforts to seek and find a combination that would provide mutual recognition,” said Verveer. “This can be used to underscore the need from the European perspective of considerably stricter limitations on data ports."

The government needs to declassify the surveillance programs that have been already revealed or partially revealed, said Daniel Castro, ITIF senior analyst, who moderated the panel, in a blog post in The Hill published Wednesday (http://bit.ly/17DaXdl). “Even if you endorse the view that Prism and related surveillance programs are necessary in the fight against terrorism, these programs will be ultimately ineffective if their presence dissuades businesses and consumers from using the services of U.S. companies,” Castro wrote. Castro said Congress should pass legislation to require companies to disclose details about government requests for information on a regular basis and for the administration to work with international partners to make transparency a key component of future trade agreements. “While there is a potential backlash about Prism from U.S. companies, there is an even bigger threat from other nations,” said Castro during the panel.