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Some foreign companies and politicians are looking at building offshore servers to preserve data privacy. This comes as a new opportunity for them after news of NSA internet spying has users all over the world deeply concerned. Companies are already advertising German email providers as more secure alternatives. And Brazil is pushing to host their own private servers.
German Encrypted Email Service
Email Made in Germany is an initiative by three of Germany’s largest email providers. The partly state-owned Deutsche Telecom teamed up with 1&1 Internet AG and one other email provider to offer a new service. They are betting that the promise of privacy after charges of U.S. government surveillance will prompt multiple sign-ups. The companies promise that the surveillance of email internet traffic will be blocked by rerouting emails through German servers and providing email encryption. Since the new service became available in August, it has already amassed more than a hundred thousand German users. The 1&1 Internet AG spokesman, Jorg Fries-Lammers, told the Wall Street Journal that they will secure users’ emails with that data protection provided by German law. Smaller German companies are also looking at the NSA scandal as a boon. antispameuropeGmbH Chief Executive Oliver Dehning says that their spam-protection software can now have the chance to surface against the big names like Symantec and Amazon. Both companies declined to comment. Dehning also said that the lack of faith after the revelations of mass surveillance is giving all local companies that chance to contribute to protecting their home market.
Information Technology and Innovation Foundation Senior Analyst Daniel Castro used the Cayman Islands to analogize what foreign internet companies seek to become in the realm of data privacy. This nonpartisan Washington D.C. company can see the potential of having untouchable islands of privacy to which users all over the world can turn for help. Though the final outcome looks good from a marketing perspective, logistics concerns may raise costs for users and the host countries. Some laws covering data privacy mean that data must be stored in-country. Infrastructure costs will peak with the addition of domestic walls that must be erected in line with the online services. Many are predicted to be unable to compete with the economies of scale, especially when they will not be able to outsource to cheaper foreign data centers. The director of the Institute for Technology & Society in Rio de Janeiro does not think it is feasible. Director Ronaldo Lemos believes that the internet cannot be bypassed, as these in-country server arrangements and private email service setups indicate. He said that data must still circulate through different countries. For instance, Germany has strict privacy laws but Email Made in Germany cannot ensure the privacy of users outside the country. Only users who send email to fellow Email Made in Germany users can be sure that the U.S. and German governments cannot read their messages.
Foreign Politicians Lobby for Privacy
Politicians outside the U.S. have been working hard on setting new data-privacy rules since the revelations of U.S. government internet surveillance. The confirmed gathering of American email data by the NSA has fueled this push. In the European Union, politicians are revisiting the push for a euro cloud system that will keep EU citizens’ data on local servers. France is backing more solid laws on data protection including details on data privacy regulators and data transfers outside the EU. In addition to the private email service launched by the Deutsche Telecom team, Germany is pushing for a cancellation of data sharing agreements with the US.
These EU countries believe that their data privacy laws will give them the competitive edge that they need to see massive growth in their own internet companies. Many foreign countries have long sought to gain an advantage over internet giants like Google. With privacy as the new and greatest selling point for internet data services, they are grabbing this opportunity. But some are skeptical since it seems likely that all these countries will someday spy on their citizens the way that the US is doing now. CloudSafe GmbH owner Roberto Valerio said that business has increased 25% since the NSA scandal hit the presses. But he believes that sooner or later there will be some other agency who has gained the spying capabilities of the US spying on users.
Among other countries pushing for domestic data hosting is Brazil. The Brazilian government is also resurrecting a previously dormant bill and calling for an immediate vote on it. This move is to make sure that data on all Brazilians is required to be stored on only in-country servers. But Brazil does not protect its citizens’ Internet data privacy and so they are not safe from their own governments’ snooping. Facebook reported that Brazil made 715 requests for user data in the first half of this year. India meantime is working on a way to stop government officials from using US email services like Google and Yahoo. Some find this ironic as India is the biggest outsourcer of data storage services for US internet companies.
Implications for Internet Companies
US companies were the first to be approached on the subject of in-country data storage and private email services. Chief Operating Officer Sheryl Sandberg spoke for Facebook by stating that these new requirements will impose risks. Fragmenting the internet will be costly and limit the current level of economic and social opportunities that Facebook offers. Google and Yahoo were also contacted, but they gave no response. Deputy general counsel John Frank of Microsoft commented that the data privacy scandal has caused their customers worldwide to increasingly lose trust in the company.
It was estimated months ago by the Information Technology and Innovation Foundation (ITIF) that the Snowden revelations would severely impact US foreign relations. They estimated that Silicon Valley could lose $35 billion in annual revenue. They predicted that most of this would be the result of overseas contracts being cancelled over data privacy concerns. Another recent survey, this one conducted by industry group Cloud Security Alliance, reported that over half of their non-U.S. members would not likely continue to use U.S.-based cloud services because of the same security concerns. Ten percent said that they had already canceled a contract.
Reactions from all over the world paint a gloomy picture for the future of US internet companies. President Dilma Rousseff of Brazil attacked U.S. snooping on in a United Nations address and canceled a planned visit to Washington in protest. Vice President Neelie Kroes of the European Commission continues to urge EU companies to publicize their privacy policies. Kroes supervises the EU’s digital portfolio and speaks and Tweets about privacy as both a fundamental right and a competitive advantage for the EU.
Hide IP VPN Services
Many countries want to become competitive with the biggest names in internet services and technology. But the economic future of these countries looks gloomy, at least over the short-term. The privacy scene on the other hand is not looking very bright over the long term. It seems that regardless of what policies come into play, hide IP VPN services will still be many internet users’ best bets for preserving their privacy online. The superior data protection capabilities of reliable hide IP VPN companies will not soon be superseded by any local government’s promises of data privacy. And it looks like these promises will prove false in the end as more governments become increasingly skilled at spying. Hide IP VPNs have become staples for many internet users who fear data breaches and crave better online security. At the end of the day, Hide IP VPNs will be here to stay.