Trade groups representing Facebook Inc., Microsoft Corp. and Apple Inc. are pushing the Senate to pass legislation limiting National Security Agency spying before the Republican majority takes control of the chamber.
A coalition of Internet and technology companies, which also include Google Inc. and Twitter Inc., support a bill the Senate plans to vote on Nov. 18 to prohibit the NSA from bulk collection of their subscribers’ e-mails and other electronic communications. Many of the companies opposed a Republican-backed bill the House passed in May, saying a “loophole” would allow bulk collection of Internet user data.
Members of the Consumer Electronics Association “have already lost contracts with foreign governments worth millions of dollars,” in response to revelations about U.S. spying, Gary Shapiro, president and chief executive officer of the group that represents Apple, Google and Microsoft, wrote in a letter sent to all senators on Nov. 13.
The clock is ticking. If a final bill isn’t reached this year, the process for passing legislation would begin over in January under a new Congress controlled by Republicans, many of whom support government surveillance programs.
U.S. Internet and technology companies are confronting a domestic and international backlash against government spying that may cost them as much as $180 billion in lost business, according to Forrester Research Inc.
The issue emerged in June 2013 when former NSA contractor Edward Snowden revealed a program under which the U.S. uses court orders to compel companies to turn over data about their users. Documents divulged by Snowden also uncovered NSA hacking of fiber-optic cables abroad and installation of surveillance tools into routers, servers and other network equipment.
Apple and Google have retaliated by offering stronger security, including on new smartphones, that will automatically shield photos, contact lists and other documents from the government. That, in turn, has heightened tensions with law enforcement agencies that want access to the data for criminal investigations.
The Senate bill, S. 2685, would end one of the NSA’s most controversial domestic spy programs, through which it collects and stores the phone records of millions of people not suspected of any wrongdoing. In addition to curbing data collection, the legislation would allow companies to publicly reveal the number and types of orders they receive from the government to hand over user data.
Instead, the NSA would be required to get court orders to obtain the records, such as numbers dialed and call durations from Verizon Communications Inc. and other carriers. The phone records don’t include the content of communications, and the carriers would be given liability protection and compensation under the bill.
The bill also would require the government to narrow its surveillance, forbidding authorities from collecting all information about a particular service provider, or from collecting geographic data like a city, ZIP code or area code.
“The American people are asking us to protect their privacy,” Senator Patrick Leahy, a Vermont Democrat and chief sponsor of the bill, said in an e-mailed statement.
“It is time to show the American people that Congress is about more than talking points, sound bites, and the next campaign,” said Leahy, the outgoing chairman of the Senate Judiciary Committee. Republicans won control of the Senate in the Nov. 4 elections and will take over in January.
U.S. companies are in danger of losing more business to foreign competitors if the NSA’s power to spy on customers isn’t curbed, according to a July report by the New America Foundation’s Open Technology Institute.
Forrester Research analyst James Staten has estimated that the spying revelations could cost the American cloud computing industry as much as $180 billion through 2016 as foreign governments and competitors contract with other companies.
Cisco Systems Inc. became one of the first companies to go public with concerns about NSA spying. The revelations affected sales in China and caused customers in other countries to hesitate when making decisions about buying products, John Chambers, chairman and chief executive officer for the San Jose, California-based company, said during an earnings conference call in November 2013.
Brazil is planning a $185 million project to lay fiber-optic cable across the Atlantic Ocean that might be built without any U.S. companies, said Francisco Ziober Filho president of the state-owned telecommunications company Telecomunicacoes Brasileiras SA, known as Telebras.
Along with CEA, other industry trade groups that support the Senate bill include the Information Technology Industry Council and The Internet Association.
“Many companies have lost business, or face laws designed to restrict data flows, due to foreign governments’ fear that the U.S. government can reach company-managed data at will,” Shapiro said.
Although Microsoft and Verizon have lost some contracts in Brazil and Germany, and Cisco has reported declining orders from emerging markets, the finances of most U.S. technology companies have held up so far. Gross margins for the companies in the Standard & Poor’s 500 Information Technology Sector Index are at their highest levels since 1990, according to data compiled by Bloomberg.
The Senate vote on Nov. 18 will be a procedural motion to allow debate on the measure and amendments to begin. Although the bill is supported by President Barack Obama’s administration, it’s unclear if enough senators will vote to allow debate to begin.
Senator Saxby Chambliss of Georgia, the top Republican on the Senate’s intelligence committee, has said there’s no urgent need to pass the bill. The law authorizing the NSA to collect bulk phone records expires on June 1, meaning the new Congress can wait until then to pass legislation, Chambliss told the U.S. Chamber of Commerce in October.
The U.S House passed a bill, H.R. 3361, curbing NSA powers in May. However, there are differences between the House bill and the Senate measure that could complicate efforts to come to a final agreement by the end of the year.
A group of technology companies, including Facebook, Google and Apple, opposed the House bill because of what it called an “unacceptable loophole that could enable the bulk collection of Internet users’ data.” Some lawmakers who voted against the bill agreed that the legislation should have been stronger.