Technology company executives left a meeting with President Barack Obama with no commitment to limit government snooping on internet traffic, according to an industry official briefed on the session.
The group included executives from seven companies, including Marissa Mayer of Yahoo and Sheryl Sandberg of Facebook, that are pressuring the administration and Congress to restrict the National Security Agency's scooping up of their users' data. The topic consumed most of the discussion.
Ms. Mayer, Yahoo's CEO and an Obama campaign donor, warned the president that backlash over U.S. spying may splinter the internet as countries adopt different standards to thwart surveillance, according to the industry official, who asked not to be named because yesterday's discussion was private.
Mr. Obama's relationship with Silicon Valley is being tested by the damage from disclosures by former NSA contractor Edward Snowden about the government's collections of internet and phone data. Mr. Obama has said he wants a solution that balances national security with privacy interests of U.S. citizens. Also at stake is whether his broader policy agenda gets sidetracked by the furor over spying.
For the companies, it's a matter of the bottom line.
"They see real risk to their market share," said James Lewis of the Center for Strategic and International Studies in Washington. "You've got German, Chinese even Russian companies saying 'Hey, buy from us, that way you won't be at risk.' It's crazy. That's what this has become -- an opportunity for commercial advantage as well as an uproar over privacy."
Reports about U.S. spying abroad may cost U.S. companies as much as $35 billion in lost revenue through 2016 because of doubts about the security of their systems, according to the Information Technology & Innovation Foundation, a policy research group in Washington.
While the administration's agenda included talking about fixes made to the government's health-care website and federal information technology development, Obama senior adviser Valerie Jarrett said "99%" of the meeting was spent on discussing the NSA surveillance.
Ms. Jarrett said before Obama joined the meeting with executives, Jeffrey Zients led a discussion about HealthCare.gov and ways to improved federal government technology. When Mr. Obama entered the room, the focus turned to surveillance, Ms. Jarrett said at a Politico breakfast today.
Yesterday's White House meeting occurred a day after a U.S. district judge ruled that collecting bulk phone records -- such as numbers dialed and call durations -- of millions of Americans is probably unconstitutional, and four days after an advisory panel gave Mr. Obama recommendations for changes.
Mr. Obama is set to make public his proposals for reining in NSA surveillance next month. He is meeting this morning with the five-member advisory group in the White House situation room.
Google Chairman Eric Schmidt discussed five principles the companies favor for changing the NSA programs, including limiting collections and being free to tell the public and their users what data the government is seeking from them, the official said.
The principles were part of a Dec. 9 letter to the president and members of Congress from Yahoo, Facebook, Google, Apple, Microsoft, Twitter, LinkedIn and AOL. All except AOL were represented at yesterday's meeting.
Mr. Obama didn't commit to a course of action to address the companies' concerns, the official said. The White House said in a statement that the president promised to "consider their input as well as the input of other outside stakeholders as we finalize our review of signals intelligence programs."
Lawmakers are poised to act.
The meeting "should be a wake-up call to government leaders that the law must keep up with technological advances in a way that protects the privacy rights of law-abiding Americans and the competitiveness of U.S. companies," Senator Ron Wyden, an Oregon Democrat and critic of the NSA's operations, said in a statement.
Also at the meeting, according to the White House, were Tim Cook, CEO of Apple, Dick Costolo, CEO of Twitter; Brad Smith, general counsel at Microsoft; Erika Rottenberg, VP-general counsel of LinkedIn; Chad Dickerson, CEO of Etsy; Reed Hastings, CEO of Netflix; Drew Houston, CEO of Dropbox; Burke Norton, chief legal officer of Salesforce.com; Mark Pincus, chairman of Zynga; Shervin Pishevar, co-CEO of Sherpa Global; Brian Roberts, CEO of Comcast and Randall Stephenson, CEO of AT&T.
The White House first sought the meeting with the tech leaders to discuss fixing the federal health-care website and government information-technology stumbles. It was requested before the Dec. 9 letter was released, according to an administration official familiar with the details, who wasn't authorized to speak publicly.
The technology leaders held out for a guarantee that an NSA discussion would be on the agenda, according to another person who asked not to be named because the negotiations were private.
"This really comes down to people beginning to take seriously the reputational crisis we're in, both for the U.S. government but also for these companies directly," said Sascha Meinrath, director of the Open Technology Institute at the New America Foundation in Washington.
A White House advisory committee, in a report to Mr. Obama last week that hasn't been made public, said the government should continue collecting bulk records on every U.S. phone call with new restrictions to protect privacy, according to an administration official familiar with the report.
"What has been leaked of the review group's recommendations are incredibly modest changes that are extremely unlikely to restore global trust," Mr. Meinrath said.
~ Bloomberg News ~