Ballmer_NSA-405x300“Online services might withdraw from the country, the US-based software giant said.” – Source

The tech giants got their turn yesterday to submit responses to the proposed legislation and in an astounding statement (above) Microsoft appeared to threaten New Zealand by alluding to the fact that they may withdraw themselves from the country if the law in its current form goes ahead. When you consider that Microsoft’s delivery model moving forward is pure online, the withdrawal of “online services” would mean that New Zealanders would no longer have access to any of their software, eventually.

In a day that was reminiscent of an American “democratic” lobbying session, the tech giants local and international turned up to submit on the law. But should we care? Microsoft is already fighting a PR war of global proportions after allegations that they turned over data to the NSA via PRISM and built in backdoors on some of their services to allow the spy agency to get around encryption and other security features. Google has also been implicated in the mess.

The backlash has been immediate. Globally we have seen in the last month ten percent of contracts with U.S. based Cloud providers (such as Microsoft and Google) cancelled and calls for U.S. onshore Cloud services to be boycotted in favour of countries that are not perceived to have such draconian surveillance laws supported by tech companies that have actively worked with spy agencies.

Perhaps New Zealand would be better off without Microsoft given the claims that:

Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new portal;

The agency already had pre-encryption stage access to email on, including Hotmail;

The company worked with the FBI this year to allow the NSA easier access via Prism to its cloud storage service SkyDrive, which now has more than 250 million users worldwide;

Microsoft also worked with the FBI’s Data Intercept Unit to “understand” potential issues with a feature in that allows users to create email aliases;

In July last year, nine months after Microsoft bought Skype, the NSAboasted that a new capability had tripled the amount of Skype video calls being collected through Prism;

Material collected through Prism is routinely shared with the FBI andCIA, with one NSA document describing the program as a “team sport”. – Source

It would seem to me that some of the fears of the various Government Cloud policy makers appear to be true when it comes to data sovereignty. Data that is stored in Microsoft’s Cloud overseas is accessible by a foreign state.

Microsoft’s head of corporate affairs Waldo Kuipers said their 3500 registered partners in New Zealand who deliver services locally would have to build additional interception capability into their services.

He said the bill directly conflicted with the Electronic Communications Privacy Act in the US, and Microsoft may need to make a decision on which country’s law it close to obey. – Source


I hardly think that Microsoft’s “3500 registered parties” which no doubt include Dick Smith in Gisborne, are going to be required to build anything. Let’s not forget, it’s all online and delivered from the Microsoft mothership right? The next statement is farcical, to threaten not to obey New Zealand law is just ridiculous.

Both Microsoft and Google are in the middle of PR disaster of epic proportions having both been caught in the PRISM scandal. They would be better to answer questions about their involvement, locally, instead of threatening to withdraw their products. Questions like:

  • How many New Zealanders have had their private information, emails, skype, and cloud files, turned over the NSA by Microsoft?
  • Was the New Zealand government made aware of that information?
  • Has Microsoft breached the Privacy Laws of New Zealand?
  • Has Microsoft supplied information to U.S. spy agencies on New Zealand companies that use their services?
  • What is Microsoft doing to ensure that the privacy of it’s New Zealand personal users, corporate users, and government users is being protected?

Those are the questions of the day that should be answered so that New Zealand can have continued confidence in the services that Microsoft provide the country. I for one, no longer have that confidence.

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