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Germany Thumbs Nose at the NSA
The global backlash against the National Security Agency’s cyber spying picked up a notch as Germany’s leading telecom company announced that all email flowing among three of the nation’s email services will remain on German servers at all times. The move reflects powerful differences in the way that Americans and Europeans view privacy—and just happens to coincide quite nicely with the commercial interests of European Internet companies, who have yet to achieve anything close to the scale of Google Inc. or Amazon.com Inc.
Lost in the political and economic battle, which President Obama addressed are the interests of corporations and other users, who will find that their enhanced privacy—whether they want it or not—will add complexity to their business. President Obama called for an overhaul of surveillance policy that would disclose more information about a secret national security court and disclose more information about the National Security Agency. He also acknowledged that the review was prompted by NSA leaker Edward Snowden.
“It is completely political,” David Horrigan, an analyst and attorney at 451 Research, said of the new policy in Germany. Announced by Deutsche Telekom AG, the new program, called “Email Made in Germany,” will encrypt German email and warn Internet users when they are sending email to a service that isn’t part of the program. The three participating companies are DT’s T Online, GMX and web.de. A government mandate of the same policy has been discussed, but not enacted.
If national security demanded it, German and French law would allow authorities to exercise the same sort of surveillance powers that their counterparts in the U.S. wield, according to Mr. Horrigan, who specializes in e-discovery and information governance. He said that he wasn’t making an assessment of the merits of the NSA program one way or the other.
But political gestures often have huge business consequences. Mr. Horrigan said U.S. Internet companies need to take the European objections to NSA spying seriously. “I think the U.S. companies really must address the issue,” he said. He said that they need to explain just how narrow the differences in the U.S. and European government spying powers really are. If they don’t, European rivals may well succeed in using the NSA spying issue as a competitive opening.
At the technological level, the new program adds complexity to networking and IT, but it is technologically feasible, according to Mr. Horrigan. Even in developed countries, “you can stipulate that certain kinds of information have to be on certain servers,” he said. That’s true even in the case of U.S. operations of German companies, he said. That does not mean, however, that it is easy to do.
“Although it’s feasible technically to limit data to non-US servers, from a practical standpoint, it’s a nightmare. For instance, most large German-based multinationals have U.S. operations. Keeping that data off U.S. servers presents substantial challenges,” he said.
Compliance would add costs to doing business, Mr. Horrigan said. “One way to comply with the new policy would be to have silos of computer operations, which is not particularly efficient,” Mr. Horrigan said. That would mean keeping U.S. computer operations on U.S. servers, German computer operations on German servers, and so forth—adding layers of infrastructure for no technological reason, at a time when most operators are reducing them.
It’s also unclear just how effective a defense email encryption will be. One such service shut down this week, as the Download reported on Friday. Jon Callas, co-founder of Silent Circle Inc., said on Twitter and in a blog post that Silent Circle had ended Silent Mail. Silent Circle will continue to offer secure texting and secure phone calls, but email is harder to keep truly private, Mr. Callas wrote.
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