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Four Years In, the Effect of Edward Snowden on the Technology Ecosystem

Edward Snowden was the Keynote Speaker for last week’s Cantech Investment Conference.

Immediately after posting the announcement earlier this month, they received a barrage of likes, dislikes, and comments such as “TRAITOR!” and “HERO!”

The former intelligence officer and whistle-blower has caused an enormous amount of controversy that has persisted since he leaked information about the NSA’s global surveillance program in 2013. But what relevance does this have in the technology investing world?

The Snowden leaks revealed that the National Security Agency had access to the systems of US tech giants like Apple, Facebook and Google, among others, which they were using to spy on the general public. Major communications companies such as AT&T were also shown to be complicit in providing private information about its customers.

Curtailed Growth Strategies

As the tech giants rapidly began losing trust as a result of the Snowden Effect, many of their expansion efforts were curtailed.

Google’s plan to work with Indian election officials to improve voter registration was cancelled. Cisco’s router sales dropped substantially in China. European regulators threatened to block AT&T’s purchase of Vodafone. Russia, losing trust in Intel and AMD processors, developed plans to replace them with Russian Baikal processors and Linux. The Chinese government identified Apple and iPhone usage as a “threat to national security” due to its collection of sensitive data, such as economic and “state secrets.”

Market Perception

As privacy had immediately become a top concern for consumers, the tech giants became worried they would lose market share to foreign rivals, and thus put encryption and privacy at the forefront of their services and marketing efforts.

Google and Yahoo rolled out end-­to­-end encryption systems for their email service to prevent the NSA and other intel agencies from accessing their data. In addition, Apple entered into a very public legal battle to prevent an obligation to provide data from iPhone users to the FBI for their investigations.

Opportunities for Emerging Companies

Where there is a challenge in a market, there is an entrepreneurial opportunity. Naturally, with all the concern around privacy, the privacy economy has been booming.

New tech startups have been emerging to capitalize on these concerns. Confide, a startup that launched in 2013, provides an app that allows iMessages to self­destruct after being sent. VIPole Secure Messenger, another startup that has been gaining substantial traction, provides the world’s first encrypted service for multi-­user video and audio conferencing. Duckduckgo is a tech startup that has created a search engine that does not store, and therefore share, data on its users.

Edward Snowden stated that his biggest fear is that nothing would change as a result of his disclosures. From the perspective of technology and the business world, the changes are still being felt fouryears later, and are expected to continue in the future.

Stuart Browne is the CEO of Pycap Corporation and Pycap Venture Partners.

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