Election officials in India canceled a deal with Google to improve voter registration. In China, sales of Cisco routers dropped 10 percent in a recent quarter. European regulators threatened to block AT&T’s purchase of the wireless provider Vodafone.
The technology industry is being roiled by the so-called Snowden Effect, as disclosuresby former National Security Agency contractor Edward Snowden about the extent of American spying worldwide prompt companies to avoid doing business with U.S. firms. The recent setbacks for Google, Cisco and AT&T overseas have been attributed, in part, to the international outcry over the companies’ role in the NSA scandal.
Fred Cate, a law professor at Indiana University, said criticism over Silicon Valley’s involvement in the government surveillance program was initially limited to European politicians “taking advantage of this moment to beat up on the U.S.”
“But the reports from the industry are showing that it is more than that,” he added. “This is more than just a flash in the pan. This is really starting to hurt.”
The impact of the Snowden leaks could threaten the future architecture of the modern Internet. In recent years, computing power has shifted from individual PCs to the so-called cloud — massive servers that allow people to access their files from anywhere.
The Snowden revelations undermined trust in U.S.-based cloud services by revealing how some of the largest American tech companies using cloud computing — including Google and Yahoo — had their data accessed by the NSA. About 10 percent of non-U.S. companies have canceled contracts with American cloud providers since the NSA spying program was disclosed, according to a survey by the Cloud Security Alliance, an industry group.