America's data protection laws were 30 years old, he said, and almost any technology that was 30 years old was in a museum by now. Microsoft's Brad Smith said there were only two ways to protect privacy: better technology and stronger privacy legislation. Google had started encrypting network traffic between its data centers, as had many other Silicon Valley firms, because they had found out from the Edward Snowden leaks that intelligence agencies were tapping their links. Schmidt said the government shouldn’t be surprised that his firm and others were gearing up their encryption. Wyden also wondered why cops and feds were outraged at the decision by Apple and Google to encrypt files on smartphones by default: the police already had all the powers they needed to monitor criminal activity, he said, and any backdoors in the software for official snoops to use could be exploited by criminals and hackers. Governments could start enacting protectionist trade laws under the guise of safeguarding privacy and deterring spies. Wyden said laws that control where information must be stored would undo decades of hard work in bringing down trade barriers and opening up freer markets. If such laws were enacted, it would destroy the ability of small startups to operate outside of US territory, he claimed.įacebook's Colin Stretch added that having overseas data centers would cause massive privacy problems of their own: governments that don’t respect citizens' privacy would be within reach of large amounts of data. Homsany pointed out that 70 per cent of Dropbox's customers were overseas, and it would cost over a billion dollars to comply with such regulations for Western Europe alone. Such policies therefore have the ability to balkanize internet traffic. US companies with large numbers of customers in overseas territories therefore would have to build data centers in each market, which would drastically drive up costs. What's terrifying the tech industry is the prospect of more laws like those enacted in Russia: the President Putin-led nation insists data on Russian citizens is stored solely on servers in the country.
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