Microsoft Corporation (MSFT): NSA security fallout is ‘getting worse’

Posted Jun 20, 2014

Brad Smith (pictured above), the general counsel at Microsoft Corporation (NASDAQ:MSFT), discussed the NSA fallout at the GigaOm Structure conference in San Francisco. Smith said that the fallout for the NSA spying scandal is getting worse for U.S. tech companies. Smith warned attendees that U.S. political establishment figures need to figure out how to rein in its spy agencies otherwise there will be heavy repercussions for tech companies.

“What we’ve seen since last June is a double-digit decline in people’s trust in American tech companies in key places like Brussels and Berlin and Brasilia. This has put trust at risk,” said Smith. Smith said that the longer we wait, the worse the problem will become. Other governments have set up new procurement rules that could freeze out U.S. based companies due to spying at the NSA.

For example, the Chinese government banned Microsoft Windows 8 from a recent public sector procurement contract. Two weeks after that, the state backed media quoted Chinese analytics that warned of the dangers of using Windows 8. There is a rumor that the Chinese government may ban IBM servers as well.

The U.S. government can circumvent this issue by clearing up the rules around how it intercepts data home and abroad. It needs to clarify how deeply the NSA penetrates technology from its domestic companies and how it accesses overseas data that is held by American companies.

[Source: The Register U.K.]