"Assertions in the press that our compliance with these requests gives the U.S. government unfettered access to our users' data are simply untrue," Drummond's letter says. "However, government nondisclosure obligations regarding the number of FISA national security requests that Google receives, as well as the number of accounts covered by those requests, fuel that speculation."
Facebook general counsel Ted Ullyot in a statement said, "We urge the United States government to help make that possible by allowing companies to include information about the size and scope of national security requests we receive, and look forward to publishing a report that includes that information."
Jack Lerner, associate professor of law at the USC Gould School of Law, specializing in Internet privacy and technology, said in a phone interview that although it was plausible that the NSA's surveillance activities would make it harder for U.S. cloud computing companies to attract foreign customers, it wasn't probable. "These services have such a large degree of penetration that I don't see a mass migration away," he said. "But on the margin, it could be an issue."
At the same time, Lerner characterized efforts by Internet companies to report government information demands more fully as a double-edged sword. "If a company says it's getting lots of FISA requests, foreign customers could find that disturbing," he said.
Lerner argues that greater awareness of the extent to which the U.S. government accesses information from Internet companies has the potential to prompt a reevaluation of free business models. "This may change the equation, the perception by consumers that free services are really free," he said.
And in the business world, the need for due diligence has never been greater.
"When you have a cloud service that says we're going to use third-party storage or third-party transmission for hosting, or unencrypted transmissions, anyone who deals with privileged material, trade secrets or foreign clients will have to think hard about who is going to be collecting and storing all that data and what they will do with it," he said.