Edward Snowden revelations prompt crisis of trust in Germany
European experts question whether they can rely on US computing models or whether they need to develop their own fail-safe equipment
When Germany's federal criminal police office needs to share sensitive information these days, employees type the particulars and get them hand-delivered.
Last year, agents would have trusted the security of e-mail. But that was before Edward Snowden and the revelations about the US National Security Agency's PRISM electronic intelligence-gathering programme. After Snowden, it's a new digital world.
"We're now carrying our information to our allies on foot," said Peter Henzler, vice- president of the Bundeskriminalamt, known as the BKA. He was speaking recently at a German Interior Ministry discussion on the country's digital future. The focus of the panel was how to counter US surveillance measures and what it will take for Germans to be safe again on the web. "We're no longer using the open internet," he said.
The message is clear: No longer can the US be trusted to honour the privacy of German life and policy.
Henzler's concerns weren't isolated. The worries appear to reflect the wider German, and even European, frustration with the reach of the NSA's surveillance programme.
Hardly a week passes in Berlin without some new revelation about the dastardly depths to which the American spy programme invaded German privacy, or at least a new way in which to react to the scandal.
Last week, news broke that the United States had tapped the mobile phone of Gerhard Schroeder when he was German chancellor from 1998 to 2005. This came four months after news broke that the same American surveillance programme was tapping the mobile phone of the current chancellor, Angela Merkel.
There are many more examples beyond news stories. Thirty-two per cent of Germans told pollsters that they had either quit or cut their time on Facebook because of spying fears. German television ads note the peace of mind and freedom that comes with e-mail that doesn't leave European servers. Providers now say that they encrypt all e-mail.
Such thoughts aren't limited to Germany. A US$900 million French deal with the United Arab Emirates for two new intelligence satellites appears to be in doubt after the buyers noticed US components in the French satellites that they feared could compromise their data.
Florian Glatzner, a policy officer with the German Federal Consumer Protection Agency, says the office is fielding many consumer questions about how to ensure that communications and data are safe from the NSA.
"A lot of the trust in the big internet companies is gone," he says. "And most of the big internet companies were based in the United States."
Thomas Kremer, a data privacy board member for Deutsche Telekom, the German phone giant, recently noted that: "Regardless of what one thinks of Edward Snowden, he created an awareness of internet security and we should be grateful for that."
Experts note that there may be no better place to find the effect of this distrust than in the emerging cloud computing market. Before Europe met Snowden, the continent was moving fast to an American-dominated cloud computing future.
The biggest players in the market were US companies. The best products were generally accepted to be American. Some people insisted that a European cloud, governed by European privacy laws, was needed to protect European communications and data. But they were ignored, or cast as loonies.
But that was before Germans and French and Brazilians learned that the NSA - in the name of fighting terrorism - peeked at essentially all communications and data that crossed its path.
The American dream of total cloud domination might be drifting away. There are signs of that: By 2016, US companies are expected to lose US$21 billion to US$35 billion in new contracts that they'd been expected to collect, according to some estimates.
German cloud companies are posting better-than-expected earnings. There have been signs that some US tech companies might be suffering. Network equipment maker Cisco, for instance, noted government issues when it predicted a revenue drop for the current quarter.
The new reality for some critics is that data that passes through the United States isn't safe.
"A year ago, a German cloud was a bad idea," says Daniel Castro, a senior analyst for the Information Technology & Innovation Foundation in Washington. "German business didn't want a German product to help them in a global market. They wanted the best product. Today, even if businesses still believe a German cloud is a bad idea, they're accepting it as a necessary idea."
There's even a new initiative, "German Cloud", backed by a variety of German tech companies. The motto is "My company data stays in Germany."
Castro noted that this is a bad time for the American brand to lose lustre. The market is growing rapidly. Castro wants hard evidence that confirms his earlier predictions that the international market share of US cloud providers should fall by 5 per cent this year, and up to 20 per cent by 2016, because of the spying allegations.
The news could be even worse for American companies. The recent Interior Ministry panel showed just how fearful Germany has become. Reinhold Achatz, head of technology and innovation at the German steel giant ThyssenKrupp, noted that "whoever can read data is also likely to be able to change data."
"For example, they could switch off a power station," he said. "So from my point of view, it wouldn't be surprising if someone came up with the idea of switching off Germany. I'm serious about that."
Christian Stoecker, editor of Spiegel Online, the web version of Germany's most prestigious news magazine, noted: "Before Snowden, I did not know that the NSA intercepts hardware shipped to European telecommunications companies by US manufacturers and swaps the BIOS to make the equipment usable for NSA purposes." BIOS is the basic operating system that starts up a personal computer.
"The NSA practically turned the internet into a weapons system," Stoecker says. "If we want to change things, we have to enter into disarmament talks."