European firms ‘could quit US internet providers over NSA scandal’

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European commission vice-president says American cloud services providers could suffer loss of business.

European businesses are likely to abandon the services of American internet providers because of the National Security Agency surveillance scandal, the European commission has warned.

Neelie Kroes, the commission vice-president who speaks on digital affairs, predicted that providers of cloud services, which allow users to store and access data on remote servers, could suffer significant loss of business if clients fear the security of their material is under threat.

The warning came as it appeared that the Americans and the Europeans were to start investigating alleged breaches of data privacy in the EU as well as US intelligence and espionage practices.

Despite threats from France to delay long-awaited EU-US negotiations on a new transatlantic free trade pact, scheduled to open in Washington on Monday, EU ambassadors in Brussels reached a consensus on Thursday to go ahead with the talks.

They could not yet agree, however, on how to respond to a US offer of parallel talks on the NSA scandal, the Prism and Tempora programmes and issues of more traditional espionage arising from reports of how US agencies bugged and tapped the offices and embassies of the EU and several member states.

Dalia GrybauskaitÄ—, the president of Lithuania, said on Thursday that she was not seeking an apology from the Americans. Lithuania takes over the rotating six-month EU presidency this week.

While no decision had yet been taken, she said she hoped the EU-US talks on electronic surveillance would also be launched on Monday and run concurrently. Since much of the alleged US hoovering up of telephone and internet traffic in Europe is assumed to amount to commercial and industrial espionage, the two parallel sets of talks will affect one another.

Senior EU officials complain that there is no point engaging in sensitive trade talks when the other side has already eavesdropped on you and knows your negotiating position.

GrybauskaitÄ— emphasised that the American side was keen to come clean on the dispute.

"They are open to co-operation. They are open to explain," she said. "I never seek an apology from anyone. I seek information … We don't want to jeopardise the strategic importance of free trade."

Pointing to the potential fallout from the disclosures about the scale of NSA operations in Europe, Kroes, the European commissioner ..

Read more: http://www.guardian.co.uk/world/2013/jul/04/european-us-internet-providers-nsa