SurveillanceGerman IT industry hopes to benefit from NSA leaks-inspired distrust of U.S. tech companies
The German IT sector is hoping to benefit from trust lost in American technology firms in the aftermath of Edward Snowden’s leaks. The German government is looking to develop Internet security initiatives, with government departments vying with each other for a lead role. Both inside and outside the German government a proposal, known as “Schengen Routing,” is advanced which calls for data originated in Europe to be processed and stored within Europe. Critics warn that plans to create a European routing system could affect the openness of the Internet.
News that some American technology and communications firms gave the National Security Agency (NSA) access to consumer records has alarmed Americans, but also non-Americans who rely on these companies for data storage. According to market analysts James Staten of Forrester Research, American firms could lose up to $180 billion in turnover by 2016 due to distrust from customers.
Der Spiegel reports that IBM and Cisco have experienced steep reduction in foreign sales, mainly from China. Facebook and Google have urged the U.S. government to exercise restraint when using the private sector for intelligence gathering. In a move to reestablish confidence in foreign markets, Microsoft announced that foreign customers could store data in local Microsoft data centers near where they live. Critics question Microsoft’s strategy because its headquarters is in the United States, operating under American law, which may require it to submit customer information to the U.S. government in some cases.
German telecommunications firm Deutsche Telekom has proposed that data originated in Europe should be processed and stored within Europe, but critics say it is a bad idea. The proposal, known as Schengen Routing, may destroy the openness of the Internet, says European Commissioner for Digital Agenda Neelie Kroes. Kroes is focusing on the development of the European Cloud Partnership (ECP), Europe’s effort to create a digital single market for cloud computing.
According to Spiegel, countries which are parties to the agreement would be required to establish a trusted platform in which companies active in Europe must report all data breaches.
The focus on establishing Europe as a safer place to handle and store data has offered a marketing advantage for small and mid-sized European data storage firms. Ali Jelveh, co-founder of Protonet, says “the Snowden effect is real.” Protonet has created a personalized cloud device with a massive storage capacity. The firm calls it the “simplest server in the world.” Berlin-based startup Posteo offers an encrypted e-mail service. Business for Posteo has quadrupled since the Snowden revelations.
Germany’s government is looking to develop Internet security initiatives, but with several ministries eager to be involved, there is a chance of confusing which ministry is responsible for certain initiatives. The German Transportation Minister Alexander Dobrindt recently was given responsibility for the development of Germany’s digital infrastructure. Economics Minister Sigmar Gabriel, whose ministry is responsible for digital infrastructure, rejected the reassignment but agreed to move two Economics Ministry staffers to the Transportation Ministry in order to oversee initiatives for expanding Germany’s broadband network and mobile phone network.
As Germany looks to strengthen its position in the information security sector, the country’s Internet activists are worried that government will be ineffective in establishing reliable digital security. “The politicians are once again getting caught up in petty jealousies,” says Holger Mühlbauer of the German-based Federal Association of IT Security. Spiegel reports that the German government missed an opportunity to lead as an IT player by blocking the EU’s new Data Protection Directive, which regulates the processing of personal data within the European Union.
