PRISM Revelations Will Harm Digital Trade, ITIF Panel Says

WASHINGTON, July 29, 2013 — The Information Technology and Innovation Foundation held a panel on the impact of the National Security Agency’s PRISM program on digital trade last Wednesday.

Ambassador Phil Verveer, former coordinator of international communication and information policy, said recent revelations about the PRISM program have not added any real substance to concerns over privacy that have already existed for decades, they did alter the emotional atmosphere surrounding the debate. Consequently, Verveer claims that PRISM is likely to be damaging to firms involved in cloud computing and other similar services.

However, Daniel Castro, Senior Analyst for ITIF and moderator of the event, also noted that the impact of PRISM was not limited to businesses within the technology sector but would affect all industries that collect data.

Jake Colvin, Vice President of Global Trade Issues for the National Foreign Trade Council, suggested that foreign companies may take this recent exposure to disparage their American competition.

“Foreign firms are happily using PRISM as the latest club to beat U.S. businesses over the head,” he said.

The implementation of protectionist digital trade laws may also result from the revelations about PRISM, Colvin said. For example, Brazil is currently considered laws that would place restrictions on data storage.

Joshua Meltzer, Fellow in Global Economy Development at the Brookings Institution, was highly critical of such policies, noting that they ignore how businesses use and move data. He argued that restricting where a company can store data can raise costs and potentially decrease security if they are unable to utilize the best services.

They panel agreed that the largest problem is a lack of information about the scope of the PRISM program. Colvin suggested that the government correct inaccurate public perceptions of the program, step up outreach to other nations, and work to raise public understanding of how PRISM compares to surveillance programs under other governments, many of which are equally or even more intrusive.

Meltzer agreed that affecting public perception was crucial. He pointed out that PRISM does not restrict data flow, but it has harmed trust. Until that trust is repaired, people with be less willing to make transactions with commercial platforms based in America.