Tags: Microsoft | US | NSA | government

Tech Lawyer Pretends to Care About Your Privacy

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Wednesday, 11 Dec 2013 07:14 AM Current | Bio | Archive

U.S. technology giants are scared. Microsoft (MSFT), for example, makes billions from allegedly "secure" software and cloud services, but National Security Agency (NSA) leaker Edward Snowden showed how companies routinely hand over the keys with little or no resistance.

In the rare circumstances when cloud technology providers do resist, the NSA simply bypasses the legal process and collects data "upstream," through undersea cables and other weak points.
Set aside the constitutional and political issues for a moment. This is simply bad business.

A company cannot 1) falsely tell customers its products are secure, 2) charge them a premium price on that basis and then 3) facilitate or ignore future security breaches. In any other circumstances, we would call this fraud.

Microsoft, Google (GOOG) and their peers are beginning to see the problem. On Dec. 9, the companies launched Reform Government Surveillance, a joint campaign aimed at the U.S. and other governments. Whether they want to protect privacy or their own profit margins is not entirely clear.

I previously explained how the Obama administration's increasingly desperate denials would not help the U.S. technology sector. Indeed, the industry's state-sanctioned lies and deceit reveal hidden risks in all U.S. stocks.

Writing on the company's official blog, Microsoft general counsel Brad Smith said Microsoft wants to protect customer data from government snooping. Smith seems as outraged as anyone does. His pledges to regain customer trust sound sincere. Can we believe him?

Keep in mind that Smith is Microsoft's top lawyer. As an attorney, he is first obligated to protect the company. Customers are a distant second place.

Even if Smith were interested in protecting customers, Microsoft's top customer is … the U.S. government. Keeping Washington happy is very high on his priority list.

It's also possible Smith is simply lying. His blog post leaves plenty of wiggle room about encryption, transparency and legal resistance. We know the Justice Department gives secret immunity agreements to protect intelligence activities. Why not Microsoft?

There is recent precedent for such deals. This year, The Washington Post and others reported the Obama administration had a secret deal with the Pakistani government on U.S. drone strikes. Pakistan's vigorous protests were an effort to deceive angry Pakistani voters. Their government ostensibly objected to drone attacks. But, in fact, it was fully aware of and permitted them.

This tells us the Obama administration will help favored local politicians in other countries lie to their voters if doing so would serve its broader goals. To think that a government willing to protect (or coerce) other nations this way would make similar deals with privately owned companies is no stretch of the imagination.

Conversely, it is wildly implausible to think that Microsoft would stop giving the NSA whatever it asks, or that Keith "Collect it All" Alexander would ever say, "Okay, never mind." Everything we learned this year says the opposite is more likely true.

I can estimate with high confidence that 1) the NSA has already penetrated Microsoft's latest enhanced encryption and/or 2) the two have a Pakistan-like secret deal that misleads the public.

The same goes for Google, Apple (AAPL), Yahoo (YHOO) and other U.S. cloud technology providers. If I'm wrong, I invite them to issue public, unequivocal denials. To my knowledge, none has done so.

Whatever the real story, the economic damage is irreparable at this point. Our own government permits executives at publicly traded companies to lie to investors. From now forward, we must doubt everything they say. We cannot take statements like Brad Smith's at face value. To trust him is foolish. Any fiduciary who does so is naive or dangerously incompetent.

Sorry, Microsoft. We'd like to believe you, but our innocence is gone.

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PatrickWatson
U.S. technology giants are scared. Microsoft (MSFT), for example, makes billions from allegedly "secure" software and cloud services, but National Security Agency (NSA) leaker Edward Snowden showed how companies routinely hand over the keys with little or no resistance.
Microsoft,US,NSA,government
616
2013-14-11
Wednesday, 11 Dec 2013 07:14 AM
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