IBM denies sharing customer data with the U.S. government and says it would challenge any demands for information through "judicial action or other means."
IBM on Friday issued an open letter to its clients assuring them that it has not relinquished customer data to the U.S. government and it pointedly said it will do whatever is necessary to protect such data and notify customers of any government requests.
The letter was issued soon after the Intercept News Site reported last week that that classified documents pilfered by former NSA contractor Edward Snowden showed that the NSA had built technology to automatically infect "potentially millions of computers" around the world with malware in order for the agency to glean data from foreign Internet and phone networks.
[Want more on the fallout on NSA spying? Read NSA Denies Impersonating Facebook To Serve Malware.]
"Our business model sets us apart from many of the companies that have been associated with the surveillance programs that have been disclosed," stated IBM senior VP, legal and regulatory affairs, Robert C. Weber, in the open letter, alluding to NSA's Prism program and other data-collection initiatives. "Unlike those companies, IBM’s primary business does not involve providing telephone or Internet-based communication services to the general public."
As a business that provides services to corporations and other enterprise customers, IBM said its customer relationships are governed by contracts. Even in cases where IBM has access to individual communications through use of customer infrastructure, that data is owned by the client.
"If a government wants access to data held by IBM on behalf of an enterprise client, we would expect that government to deal directly with that client," wrote Weber. And if the U.S. government were to serve a national security order on IBM to obtain client data and impose a gag order prohibiting IBM from notifying that client, "IBM will take appropriate steps to challenge the gag order through judicial action or other means."
Despite its protests of innocence, IBM as well as other U.S.-based businesses are to be suffering serious business consequences as a result of the NSA Prism scandal. In November, The Center for Strategic Studies in Washington D.C. alleged that China is retaliating for U.S. government surveillance programs by curbing purchases from IBM, Cisco Systems, Microsoft, and other U.S. tech firms. IBM's sales in China declined by 23% in 2013, contributing to a 5% overall decline in revenues for the year.
In December the Louisiana Sheriffs' Pension & Relief Fund, which is heavily invested in IBM stock, sued the company accusing it of concealing ties to the spying scandal that hit business in China and ultimately led to a $12 billion drop in the company's stock value.
Concluding his letter, Weber challenged the U.S. government to have "robust debate" on surveillance reforms including new transparency provisions that would expose the scope of intelligence programs and data collected. He also called on all governments not to find ways around encryption technology intended to protect business data. Last week NSA whistleblower Snowden called encryption the last, best defense against "the dark arts in the digital realm."
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