It is high time for the European and the world’s business community to understand how U.S. spying is endangering their economic activities.

With the changed FISA laws the U.S. government can now legally spy on foreign communication without warrents and oversight. It earlier gained access to data about international money transfers. At the same time it outsources spying and data analyzing to private U.S. companies that are direct competitors of European businesses.

There is some concern in Europe how this effects the privacy of their citizens. But I have not yet seen a single piece written on the economic threat this poses to European businesses.

When I talk to my consulting customers about the issue, I find they are not only uninformed but also rather ignorant of the possible effects.

As explained by the NYT’s Risen and Lichtenblau, the new FISA law goes far beyond what has been said to be its original utility:

These new powers include the collection of business records, physical searches and so-called “trap and trace” operations, analyzing specific calling patterns.

For instance, the legislation would allow the government, under certain circumstances, to demand the business records of an American in Chicago without a warrant if it asserts that the search concerns its surveillance of a person who is in Paris, experts said.

Imagine a European company with sales offices in the U.S. Not only will the email and phonecalls between the office and the headquarter be read and listen too by the U.S. government, but any confidential technical documentation send to the sales office may get copied. From there it could easily end up in the hands of a U.S. business.

Most Europeans still seem to trust the U.S. government not to reveal such trade secrets to their competitors. But it is no longer simply the U.S. government that has access to the gathered information.

As Walter Pincus writes in today’s Post:

The Defense Intelligence Agency is preparing to pay private contractors up to $1 billion to conduct core intelligence tasks of analysis and collection over the next five years, …

To do analysis and collection for the DIA, Boeing, Lockheed or whoever will win those contracts, will have direct access to the information gathered by the NSA and other agencies.

If Airbus plans to make an offer to United Airlines, would the numbers in that offer stay secret to the direct competitor? This while Boeing staff might have access to Airbus’ U.S. Internet traffic via its DIA contracts?

If SAP sends a confidential new version of its business software package from its headquarter in Germany to train their personal in Japan, while Oracle staff does analysis of such traffic for the DIA, might that version end up in Oracle’s product labs?

‘Fair game’ U.S. folks might think. But their pension fund is not unlikely to hold SAP shares. Lots of U.S. mutal funds, expecting some further decline of the US dollar, have investments in European companies. The wellbeing of these companies is not only in European interest.

The U.S. has a history of using the Central Intelligence Agency, the NSA and its Echelon surveillance network to spy on companies in Europe. At least some U.S. communication software used all over the world, like Lotus Notes, has back-doors that allow for its manipulation by U.S. secret services.

Back in 1999 the European parliament looked into the issue and published a report that alleges such. Later former CIA director James Woolsey admitted as much, though he claimed that this doesn’t happen for industrial espionage but only to "fight bribery".

All this is therefore nothing really new one might say.

But the new legality of these activities, the unprecedented scope and the direct access of private U.S. companies to the captured data should be of more concern. When such ‘opportunities’ arise for U.S. companies and a lot of money is at stake, abuse is likely to happen.

Not only private citizens are endangered by FISA. Companies, commerce chambers and politicians around the world who care for the economic well being of their societies should be alarmed too.