Bullies: how to sell flawed software and beat the market

computer chips

[T]he odds are almost zero that the NSA hasn’t tried to influence Intel’s chips.” In 2012 a paper from two British researchers described an apparent backdoor burned into a chip designed by an American firm called Actel and manufactured in China. The chip is widely used in military and industrial applications. Actel says the feature is innocent: a tool to help its engineers fix hardware bugs…

Now America’s tech giants stand accused not just of mishandling their customers’ data, but, in effect, of knowingly selling them flawed software. Microsoft has always denied installing backdoors. It says it has “significant concerns” about the latest leaks and will be “pressing the government for an explanation”. The damage goes well beyond individual companies’ brands. American technology executives often use their economic clout to shape global standards in ways that suit their companies. Now that will be harder. American input to international cryptographic standards, for example, will have to overcome sceptical scrutiny: are these suggestions honest, or do they have a hidden agenda? More broadly still, America has spent years battling countries such as Russia, China and Iran which want to wrest control of the internet from the mainly American engineers and companies who run it now, and give a greater role to governments. America has fought them off, claiming that its influence keeps the internet open and free. Now a balkanisation of the web seems more likely. Jason Healey of the Atlantic Council, a think-tank, says that the denizens of Washington, DC, have lost sight of the fact that the true source of American cyber-power is neither the NSA and its code-breaking prowess nor the offensive capabilities that produced the Stuxnet virus, which hit centrifuges at an Iranian nuclear plant; it is the hugely successful firms which dominate cyberspace and help disseminate American culture and values worldwide. By tarnishing the reputations of these firms, America’s national-security apparatus has scored an own goal.

NSA and Cryptography: Cracked Credibility, Economist, Sept. 14, 2013, at 65

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