European
commission vice-president says American cloud services providers could suffer
loss of business
guardian.co.uk,
Ian Traynor in Vilnius, Thursday 4 July
2013
 |
| Neelie Kroes, European commissioner for digital matters, who said: 'If I were an American cloud provider, I would be quite frustrated with my government right now.' Photograph: Yves Logghe/AP |
European
businesses are likely to abandon the services of American internet providers
because of the National Security Agency surveillance scandal, the European commission has warned.
Neelie
Kroes, the commission vice-president who speaks on digital affairs, predicted
that providers of cloud services, which allow users to store and access data on
remote servers, could suffer significant loss of business if clients fear the
security of their material is under threat.
The warning
came as it appeared that the Americans and the Europeans were to start
investigating alleged breaches of data privacy in the EU as well as US
intelligence and espionage practices.
Despite
threats from France to delay long-awaited EU-US negotiations on a new
transatlantic free trade pact, scheduled to open in Washington on Monday, EU
ambassadors in Brussels reached a consensus on Thursday to go ahead with the
talks.
They could
not yet agree, however, on how to respond to a US offer of parallel talks on
the NSA scandal, the Prism and Tempora programmes and issues of more
traditional espionage arising from reports of how US agencies bugged and tapped
the offices and embassies of the EU and several member states.
Dalia
Grybauskaitė, the president of Lithuania, said on Thursday that she was not
seeking an apology from the Americans. Lithuania takes over the rotating
six-month EU presidency this week.
While no
decision had yet been taken, she said she hoped the EU-US talks on electronic
surveillance would also be launched on Monday and run concurrently. Since much
of the alleged US hoovering up of telephone and internet traffic in Europe is
assumed to amount to commercial and industrial espionage, the two parallel sets
of talks will affect one another.
Senior EU
officials complain that there is no point engaging in sensitive trade talks
when the other side has already eavesdropped on you and knows your negotiating
position.
Grybauskaitė
emphasised that the American side was keen to come clean on the dispute.
"They
are open to co-operation. They are open to explain," she said. "I
never seek an apology from anyone. I seek information … We don't want to
jeopardise the strategic importance of free trade."
Pointing to
the potential fallout from the disclosures about the scale of NSA operations in
Europe, Kroes, the European commissioner for digital matters, predicted that US
internet providers of cloud services could suffer major business losses.
"If
businesses or governments think they might be spied on, they will have less
reason to trust cloud, and it will be cloud providers who ultimately miss out.
Why would you pay someone else to hold your commercial or other secrets if you
suspect or know they are being shared against your wishes?" she said.
"It is
often American providers that will miss out, because they are often the leaders
in cloud services. If European cloud customers cannot trust the United States
government, then maybe they won't trust US cloud providers either. If I am
right, there are multibillion-euro consequences for American companies. If I
were an American cloud provider, I would be quite frustrated with my government
right now."
The German
chancellor, Angela Merkel, the European commission and Grybauskaitė made clear
they wanted the trade talks to go ahead as planned on Monday. France appeared
to drop its objections despite previously insisting on guarantees that the
espionage had been halted before the trade talks could start.
Grybauskaitė
also voiced suspicions of a possible Russian role in the furore, pointing to
Edward Snowden, the NSA whistleblower, being stuck in Moscow at the same time
as weekend revelations about US spying on Europe emerged in the runup to the
trade talks.
She
insisted that the espionage dispute should not be allowed to derail the trade
talks but conceded that "some countries are very sensitive on this
question." The Lithuanian finance minister, Rimantas Šadžius, said:
"The French have some problems."
EU
diplomats said ambassadors from the 28 member states engaged in "urgent
and tricky" discussions on Thursday on how to proceed. While the European
commission would lead the EU side on issues of data privacy, the talks on
intelligence and espionage practices would need to be done by national
governments.
It was not
clear where Britain fitted into the picture since it is one of the biggest EU
countries but has not been targeted by the NSA, unlike Germany or France,
according to the reports, and the UK's GCHQ has itself been collecting vast
quantities of European internet and telephone data.
Kroes
warned that US firms could be the biggest losers from the US government's
voracious appetite for information.
"Concerns
about cloud security can easily push European policy-makers into putting
security guarantees ahead of open markets, with consequences for American
companies. Cloud has a lot of potential. But potential doesn't count for much
in an atmosphere of distrust."
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