Snowden Fallout: A Year Later

June 8, 2014 Updated: June 8, 2014

WASHINGTON—About a year ago, on June 5, The Washington Post and The Guardian first reported on the National Security Agency’s secret electronic data surveillance program Prism, based on the revelations of NSA contractor Edward Snowden. Whatever one’s views on the merits and morality of these disclosures of classified information and programs, there’s no denying that Snowden’s deed has had a pronounced effect at home and abroad. It has particularly affected U.S. relations with its close allies. The domestic and international backlash has affected U.S. diplomacy, commerce, and national security.

On June 4 this year, the Center for 21st Century Security and Brookings hosted two panel discussions on the repercussions of Snowden’s disclosures. The discussions touched on regional reactions, American diplomacy and trust, Internet governance, trade, and the intelligence community. Brookings Senior Fellow Peter W. Singer moderated. 

“It was certainly one of the most, if not the most, important event in the last 12 months,” said Singer. Dr. Singer’s most recent book, “Cybersecurity and Cyberwar: What Everyone Needs to Know,” was released earlier this year.

Internet Governance

Long before the Snowden revelations, two opposing camps emerged for regulating the Internet. Authoritarian regimes, such as China, Russia, and Egypt, fear the trouble that can come to them though the Internet, and so they want their government in control, said Ian Wallace, visiting fellow at Brookings Institution. The United States and its allies want to limit government interference with content that flows over the net. This view holds that the Internet should be developed to the benefit of global citizens and consumers by maximizing the free flow of information, global trade, and political freedom, while minimizing the amount of formal control, stated Wallace and Singer in a memorandum on January 23.

After Snowden, the authoritarian states became emboldened to push back against the U.S. model, said Wallace, who was previously a senior official at the British Ministry of Defence where he helped develop UK cyber strategy as well as the UK’s cyber relationship with the United States. It has become harder for the United States to work with its natural allies, and “swing states,” like Brazil and India, he said.

The United States has had to retreat because of the international suspicions and fears aroused by the Snowden revelations. This could lead the nation to move too far away from the open and free market values that “have dominated the development of the Internet to this point,” write Singer and Wallace. They worry of further eroding “the norm that states should limit their interference with the content that flows over the net.”

“This is an important period for the future of global governance, the information economy, and what the Internet means for how states relate to one another,” stated Singer and Wallace.


The Snowden disclosures should not be viewed as a “discrete event,” but rather as part of a weakening of U.S. power in shaping the order of the world, including the Internet, said Bruce Jones, senior fellow, Brookings. We’ve seen an eroding of U.S. influence as the model for civil liberties, which Snowden posed a challenge to. 

It didn’t help our relations with allies when the president said shortly after the story broke that no American citizens were subjected to surveillance, which helped ignite the flames, said Cameron Kerry, who served as general counsel and acting secretary of the U.S. Department of Commerce.

Jones argued that the U.S. position here is “recoverable.” “There is no other place to go,” he said. Certainly, neither Russia nor China are paragons of civil liberties, he said. Jones’s research policy experience is in international security.

Jones said that our allies are thinking, “It’s just too costly to sustain the tension with the United States. So, let’s find ways to move past it.” Jones is hopeful that new elections will clear the air.

It helped too that President Obama said in January that the conversations of European heads of state would not be monitored.

Trade, Business

“Like government, industry was caught off guard,” said Bob Butler, Vice President of Government Strategies for IO. Butler served as first deputy assistant secretary of defense for cyber policy, 2009-2011. 

Some companies, such as Google and Cisco, spoke up, “but most have been very quiet. They’re thinking through this and trying to sort out what the implications are,” he said. Lively discussions are happening among investors and in boardrooms on the implications of the Snowden event.

Kerry said, “The fallout…on trade and commerce has been significant.” He quoted a spokesperson for a tech company who said, that there is “no question the Snowden disclosures have had an impact on the willingness of foreign customers to trust American providers.” The country where the business impact was the greatest is China, where Cisco announced a downturn at the end of 2013. IBM also lost business. 

The other main region of “heightened distrust” is in Europe, where “a real spotlight has been put on American companies,” Kerry said. The European Parliament directed the European Commission to come up with a plan to develop a European Internet. The aim is to keep data on European citizens from leaving European borders and data out of the hands of NSA, he said.

Every couple of weeks, surveys of U.S. businesses and foreign businesses as well as U.S. government and foreign governments, reveal heightened concerns about “data sovereignty” and “data custody,” said Butler. 

They are asking, “Where is the data? Who owns the data? Who controls the data?” he said.

Effect on Intelligence

“Data sovereignty is not just bad for business. It’s terrible for intelligence because that’s exactly why it’s being pushed,” said Stewart Baker, attorney, who was formerly at the Department of Homeland Security as its first assistant secretary for policy. He explained, “It is going to hurt intelligence enterprise significantly, but in ways that are hard to identify specifically.”

“It doesn’t help the Swedish government to be called out for cooperating with the U.S. government against Russia,” said Baker. The same was true of Norway, he said.

However, the diplomatic relationships are repairable, because they are based on mutual self-interest, and so will continue pretty much the same. But as for the companies that have cooperated with U.S. intelligence, that’s a different story.

Baker said that the companies’ owners are “very angry,” and not completely rational about it. “They probably overestimate the ultimate commercial fallout,” although there is no denying the revenue losses as a result. 

He said his clients ask all the time, “What’s the least I can do? How can I challenge this?”

Baker said that he used to have to warn his clients to be prepared if (or when) a disclosure becomes public, but that’s no longer necessary.