Sorkin calls out tech companies

In his June 10 column, New York Times’ Andrew Ross Sorkin raises some pretty interesting issues about the government’s monitoring of personal communications and the role that large technology companies play. Some of his points would make for great questions on executive calls and follow-up stories for others.

Sorkin points out that Facebook’s CEO Mark Zuckerberg and Google’s chief Larry Page both denied that their companies were involved in the government’s spying, but that doesn’t exactly add up with the facts that we know about the program:

Mark Zuckerberg, Facebook’s founder and chief executive, declared: “Facebook is not and has never been part of any program to give the U.S. or any other government direct access to our servers,” adding that, “We hadn’t even heard of Prism before yesterday.”

Larry Page, Google’s co-founder and chief executive, went slightly further. “The U.S. government does not have direct access or a ‘back door’ to the information stored in our data centers,” he said. Apple, Microsoft, AOL andYahoo followed with denials as well.

And yet President Obama and the United States director of national intelligence, James R. Clapper Jr., have publicly confirmed the existence of the Prism system, without providing any details about it.

Of course, the news — as well as the responses — raises doubts about who is telling the truth and about how extensive the spying program really may be.

But perhaps just as important, the episode also raises questions about how publicly traded companies with hundreds of millions of consumers — companies that are regulated by the Securities and Exchange Commission and the Federal Trade Commission — can, and should, react to news when pressed about involvement in confidential government programs.

He writes that the statements are likely true when taken literally, but once one denied involvement, they all had to deny it. But they’re walking a fine line, since they do provide the government with large amounts of data:

But I also don’t doubt another part of his statement that was frequently overlooked: “We provide user data to governments only in accordance with the law.”

In other words, when the government makes a legitimate request — and through Section 702 of the Foreign Intelligence Surveillance Act, which was highlighted by the leak, the government can seek vast troves of information — Google and others comply.

It is possible, for example, that Mr. Page and Mr. Zuckerberg had never been told that the government’s program was called Prism. And it is highly unlikely the government has a password granting access to company servers despite early reports quoting a government document that used the phrase “direct access” and now appears as if it overstated the case.

At the same time, however, companies like Facebook and Google have clearly worked with the government to create systems to transfer vast amounts of private data that is sought by the N.S.A. and other government agencies. The New York Times reported last week, based on people briefed on the matter, that Google and Facebook discussed plans “to build separate, secure portals, like a digital version of the secure physical rooms that have long existed for classified information, in some instances on company servers.”

That is different from the idea that the government has “direct access” to corporate servers, but it still means that the companies are providing the government with enormous amounts of data.

For it’s part, Google has requested to publicize when the government asks for data, according to the Wall Street Journal:

Google Inc. on Tuesday said it had asked the U.S. Justice Department for permission to publicly report on secret federal court orders that require it hand over information about its users to authorities including the National Security Agency.

Google’s request, made in a public letter written by its chief legal officer, David Drummond, comes days after the government on Saturday publicly acknowledged that Internet content companies had received secret Foreign Intelligence Surveillance Act requests about the activities of their users.

It will be interesting if this sparks other companies to make this information public as well. The argument being that because the agency has discussed the matter publicly, then Google should be able to disclose it.

Sorkin points out that most tech companies have “terms of service” agreements that allow them to share personal information and communications. But since most people don’t usually read those, it’s hard to know what you’ve signed up for and who will wind up with it.

This raises interesting angles for business stories. Are there ways to make those disclosures easier for people to read and understand? Is there really a way to safeguard private information?

It would also be interesting to hear if investors are concerned about the risk of losing customers or if many of these sites have become so essential that people will shrug off the privacy concerns in order to keep posting cat photos.

Here is Sorkin’s last paragraph and parting thought:

So while the nation’s biggest technology companies may not be a part of systematic large-scale spying program, it is clear that they are legally required to play a significant role in funneling data to the government. That leaves them on a tightrope balancing what they can say to their customers and investors while complying with their obligations to keep the government’s secrets.

It’s definitely an important issue and one that I’m sure will come up in earnings calls in the next couple of months. Legal departments all over Silicon Valley are gearing up for a few long nights of prepping executives on what they can and can’t say.