Privacy Advisor

How Should Your Firm Respond to the NSA Fallout?

September 13, 2013

By Angelique Carson, CIPP/US

While news of the NSA’s surveillance program surely destabilized data-sharing confidence between the EU and U.S., the ramifications will be global. That was the message yesterday from panelists of an IAPP web conference on the Snowden fallout, which looked at whether NSA revelations have changed the rules of the trade game and how companies should respond.

Even before the Snowden revelations, there was a trend toward increasing scrutiny of a company’s data protection practices, said Laurel Finch, vice president and general counsel of MobileIron, a software company that offers mobile device management solutions.

“I do think there has been a trend,” Finch said. “There are more exhibits and questionnaires being requested now.”

Nicola McKilligan, vice president and senior privacy officer at Thomson Reuters London, said the NSA revelations have heightened EU companies’ sense that they must adhere to the letter of the law.

Clients are “really concerned now to have something in place that gives them as much protection as possible,” McKilligan said. “There is less reliance on Safe Harbor.” Instead, model contracts are increasing in popularity, she said.

Privacy and security was happening later in the sales process. Now it’s a sales issue; it’s coming up in RFPs. A lot of the work has to be done earlier. For me, it’s critical to ensure our sales team and business team understand the issue and are prepared to speak about it and address it right away.
-OPower Associate General Counsel Adam Connolly

While there was always concern in Europe that the U.S. may use rights provided under the USA PATRIOT Act to access sensitive data, recent news that the NSA is capable of cracking encryption codes has added to concerns.

“In the past, if I really was worried about the PATRIOT Act, you could say, ‘Okay, it’s largely encrypted in the cloud so maybe I don’t mind too much,’” McKilligan said. “In some cases there was some protection there, we thought. But with every revelation, a layer of reassurance is stripped away, which is very uncomfortable in Europe, and I guess in the U.S. as well.”

The game has changed to the extent that companies must now have a “great story to tell” on privacy and security, said OPower’s Associate General Counsel Adam Connolly. And not only must the story be great, it’s now got to come early in the relationship with the client.

“Privacy and security was happening later in the sales process,” he said. “Now it’s a sales issue; it’s coming up in RFPs. A lot of the work has to be done earlier. For me, it’s critical to ensure our sales team and business team understand the issue and are prepared to speak about it and address it right away.”

Finch agreed, saying she has “seen an uptick in inquiries and vendor questionnaires before the process even starts.”

But are clients more concerned about government access to data or corporate access to data?

Finch said, anecdotally, people seem more concerned about corporate access.

“When you see an ad targeted to you, you know they picked up something off Facebook,” she said, adding that when the government is accessing data, one would assume the inquiry is based on suspected terrorists.

“So even if you’re on principle okay about (government surveillance), it’s not the same thing as being faced with an ad where people know you’re mining data,” Finch said.

McKilligan, in London, had an opposing European view.

“I think the reality is we think even if Google and Facebook are companies, they’ve got a European presence, they are subject to European data protection law. Our regulators can ‘get them,’” she said. “I think the difference with this is that because the NSA is in the U.S., Europeans, and in particular European regulators if not citizens, go, ‘They are out of reach. What can we do about the NSA? Nothing.’”

Whereas in Europe, she continued, they have sufficient powers and could, for example, stop multinationals such as Google or Facebook from doing business in their country.

“They are more worried about something they can’t control and can never reach,” she said.

Connolly said it’s more a combination of the two.

“Because for Google and Facebook, what the government could get was much more limited. Now, when the government gets data, it’s much more limited,” he said. “When companies like Google and Facebook get information, the data available in these data sets is extensive.”

Meanwhile, the global implications of the NSA revelations proliferate. So how should organizations respond in order to keep business thriving?

Connolly said OPower is busy training sales representatives on the issues and has developed whitepapers and talking points.

Finch said the process starts with technical due diligence and ensuring the product itself, which is used to enable security and privacy to IT administrators and end-user employees, is secure when it comes to access control and app-to-app communication. But the company has also done whitepapers and third-party studies on employee views toward employers and the importance of communicating to employees about the legal issues around data use.

“It’s this continual internal due diligence,” Finch said. “Reexamining processes, going through different audits. You’re never done.”

While much of the noise seems to have come from European companies concerned about data transfers to the U.S., Connolly said it’s “really important for U.S. companies to be a part of the discussion.”

McKilligan agreed.

“It isn’t just an issue for Europeans,” she said. “You’re going to get Australian, Korean and Japanese customers all asking the same questions, so it poses a bigger issue.”

“Even when you’re dealing with a U.S. entity, most significant U.S. companies have employees in Europe, in Asia or their employees are traveling to Europe or Asia. So that means data is moving cross-border all the time,” Finch said. “So I completely agree … it is a global issue; it’s not just European data being transferred to the U.S.”

So what’s the solution?

“There’s no silver bullet here,” said Finch.

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