Why European Internet Companies Are Surging

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Dec. 23 (Bloomberg) -- Bloomberg Contributing Editor Richard Falkenrath discuss the NSA spying scandal's impact on U.S. business on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

Kenwrath.

These european companies are getting a hit from the u.s. government.

The boeing issue is a more traditional industrial competition.

This is very complicated and involves multiple different factors.

There is an economic nationalism component where the european companies are trying to promote their national champions.

Here there is also a national security argument.

And the privacy dimension, which the european union has a different privacy framework in the u.s.. -- framework that the u.s. a government in europe wants to know something about you.

Can they go to google and say we have a laurent here in germany, you have to provide data on us -- have a warrant here in germany, you have to provide data on us?

They do that all the time.

The companies themselves have some discretion so there are certain countries where there is not this rule of law.

They may occasionally -- they may not comply.

Egypt, for instance, in the middle of the turmoil of the arab spring, it was reported twitter and facebook did not comply with some of the egyptian security services requests for data about their subscribers.

In general, the answer is yes.

Is it just an excuse to get back to european companies if anyone who has been requested to hand over the data would not do so?

I think it is more than just an excuse.

I think it is a very serious issue.

This is where the snowden revelations become important.

They make clear how extensive the powers of the u.s. government is to a tap into the systems.

These are u.s. based and the u.s. chartered companies that historically have a close tie with the u.s. government.

We found out more about that from snowden.

The u.s. has a leg up on everybody else in their ability to get some information and make use of it, use it in ways that are beyond particularized suspicion leading to a particular warrant and request for information.

Here is a question i have, the bottom line of all of this, everybody is concerned what happens with the government and how much data they are collecting on us.

How much control does the president of the united states, the civilian authority, have over these?

Could we see a dr.

Strangelove world that people worry about?

I don't worry about that.

I think it could be another branch of government or independent act.

What we have seen is that some of the techniques, in fact, a lot of the techniques got out of hand.

They are doing things that people want revealed.

Like the native data -- like the metadata.

Since the 50s, black and white movies, i have always assumed our country's intelligence agencies could go to the phone companies and credit card companies and get all the data they want.

That is what they do.

If they can't do that they are not doing a very good job.

There is a difference between the things that are done constantly and routinely versus the things we have to do out of suspicion.

I don't think metadata is the biggest problem.

I think the biggest one is rsa and encryption standards.

The story we have seen emerging over the last week is the nsa is paying when the leading to that security companies, $10 million to undermine their own subscription protocol.

That is a big problem.

Rsa is a unit of the enc.

Thank you for computing.

-- fork into getting.

-- thank you for

This text has been automatically generated. It may not be 100% accurate.

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