Fred Wilson: The Economic Case For Privacy

In June, venture capitalist Fred Wilson of Union Square Ventures spoke with WSJ reporter Spencer Ante about mobile technology and other topics at SourceDigital2013.

At around the 3:30  mark, the conversation turns to privacy in the wake of the NSA surveillance scandal. Wilson says:

I would hope that the people who worry about business interests in our government are fighting with the people who are worried about national security interests and having a debate about this specific issue, because if Western Europeans stop using Dropbox because they’re afraid the US government is able to see everything they put in their Dropbox, they may start using a service that’s based in Iceland or Sweden or Germany or France or something like that. That’s going to be really bad for Dropbox. It wouldn’t surprise me that some of that will happen. How much of it is a bigger question, right? So many people are upset about this at some level, but the question is whether people will change their behavior.

Back in March, Marvin and I made a similar case in Politico, arguing that privacy is not only a civil liberties issue but also an economic issue. We also warned that policymakers are helping foreign competitors win customers from American companies:

Other nations exaggerate the flaws in our privacy laws to edge out American tech companies for both enterprise and personal users. Our lawmakers are doing them a favor by casting a black cloud of legal uncertainty over our own industry and refusing to fix the most obvious problems. Now is the time to act.

An article on Politico this morning suggests that the NSA scandal may be waking up Congress to this issue, possibly to a strong enough degree for action. If policymakers want to ensure American tech companies remain competitive, they’ll need to swiftly pass legislation to protect privacy.

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