Snowden and NSA: A Boon to the Privacy Business
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The Fiscal Times
July 14, 2014

It’s been a little over a year since former defense contractor Edward Snowden exposed the NSA’s sweeping surveillance program – with the latest revelations confirming that the federal government has been keeping tabs on everyday citizens’ emails, phone calls and instant messages.

The Snowden revelations have been bad news for the administration -- public faith in government fell to a record low of 44 percent this year. But the revelations have been a boon to the mobile security management industry, which is seeing increased demand for privacy protection products like encryption apps and secure mobile devices.

Related: Snowden May Have Stored Doomsday Info on Data Cloud

By next year, the mobile security management industry is expected to be worth $1 billion, nearly double the $560 million it was valued at in 2013, according to ABI Research, a market intelligence firm based in New York, first noted in Reuters. Analysts say that is only likely to keep growing.

“Security and content management will increasingly account for a much larger portion of the market,” Michela Menting, ABI Research’s senior analyst in cyber security, said in a statement.

Companies have been quickly rolling out encrypted technology, like SGP Technologies’ Blackphone, an Android software-based mobile device that encrypts texts, voice calls and video chats.

“The pent-up demand for Blackphone shows there is strong, international demand for our brand’s devices and services that stand apart by placing privacy before all else,” Blackphone’s creators said in a statement during the device’s release earlier this year.

Related: Three Reasons Edward Snowden Can’t Stop the NSA

Similarly, Germany-based Sichere Mobile Kommunikation mbH (GSMK), a provider of encrypted phone services and devices, has seen the number of customer inquiries rise fivefold since the Snowden leaks, Reuters reported.

Americans are increasingly placing personal privacy ahead of safety and national security, says a new Associated Press-GfK poll. More than 60 percent of respondents said they value privacy over anti-terror protections. 

Tech experts say the interest in encryption is exploding due to a combination of factors that include paranoia driven by NSA revelations and broader concerns about cybercrime and espionage.

Michael Spierto, director of cyber security policy at Tech America, said that interest in encryption programs has grown after the Snowden leaks. But since some of the more high-quality software is quite costly – not a problem for many businesses – the draw for individuals may wear off.

Related: Thank the U.S. Government for Lousy Internet Security

“It’s more of a novelty for now,” Spierto said in an interview.

Silent Circle, a tech startup in D.C. that offers advanced privacy protections for smart phones and email communications, charges $20 a month. “It’s not much for a company, but individuals may be less inclined to pay that when there are cheaper or free apps out there,” Spierto said.

Then there’s an array of free private communication apps like WhatsApp, the texting service bought by Facebook earlier this year. The software is appealing, since it doesn’t store the names of its users.

There’s also the encrypted Snapchat-like app, Wickr, available only for the iPhone. People use Wickr to send instant messages and it’s favored by privacy advocates because of its message destruction feature: Chat can be set to self-destruct after a certain time period, according to Matthew Green, a cryptographer expert and research professor at Johns Hopkins University, who detailed the app in his blog on cryptography engineering.

Cryptographers are concerned that some encryption apps may not be completely secure. An investigation of Snowden files reported by The New York Times and ProPublica revealed last fall that the NSA has a specific program aimed at weakening encryption software – at a cost of $250 million tax dollars a year, The Times reported.

Still, that won’t keep the mobile security management industry from trying. Experts expect demand to go up – especially with more Snowden scoops. Of course some of the buyers will be the very people the NSA really should be surveilling—the terrorists, drug dealers and child traffickers.

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.