By Danny Yadron
PALO ALTO, Calif.--To hear Google Inc. Executive Chairman Eric
Schmidt tell it, the U.S. government has only itself to blame for
new efforts by Google and Apple Inc. to keep police out of
suspects' smartphones.
Speaking at a round table of technology executives organized by
Sen. Ron Wyden (D., Ore.), Mr. Schmidt offered Silicon Valley's
first public retort in a renewed debate about how far technology
companies should go to protect user data.
Last month, Google and Apple said they would begin encrypting
data on their phones in ways that would prevent them from
unscrambling it for police--even with a warrant.
The director of the Federal Bureau of Investigation, James
Comey, said last month that he was "concerned" the moves might help
people "place themselves beyond the law."
Other U.S. officials said it marked a new low in relations
between Silicon Valley and Washington since former National
Security Agency contractor Edward Snowden began leaking state
secrets last spring.
On Wednesday, Mr. Schmidt replied.
"The people who are criticizing this are the ones who should
have expected this," he said.
At another point, he said new regulations by foreign governments
to shield more data from U.S. spying would end up "breaking the
Internet."
He also said that Google had been "attacked" by the British
version of the NSA.
Documents leaked by Mr. Snowden indicated spies mined data from
Google's overseas data centers without its knowledge.
Sen. Wyden organized Wednesday's event at a high school here to
argue that revelations about U.S. electronic surveillance were
hurting U.S. tech companies, as foreign governments pushed their
citizens to use local technology that might better be shielded from
U.S. spying.
Over the past year, Mr. Schmidt, 59 years old, has become one of
the most outspoken executives about NSA surveillance leaks.
Google is based in nearby Mountain View, Calif., and the
audience of students and local technology employees interrupted him
with applause at several points.
The FBI and NSA didn't respond to requests for comment. Neither
agency had a representative at the hearing.
Other companies represented included Microsoft Corp., Facebook
Inc., Dropbox Inc. and Greylock Partners, an influential
venture-capital firm.
"People won't put their information in a bank they won't trust,"
said Microsoft General Counsel Brad Smith.
Industry executives acknowledged that it is hard to know exactly
why they don't win a customer, and that most of the data suggesting
that foreign customers are turning away from U.S. suppliers was
anecdotal.
It sometimes wasn't clear whether the executives were more
troubled by U.S. spying or the negative reaction to it. Tech
companies were embarrassed that Mr. Snowden's documents included
their corporate logos and showed how the companies cooperated with
government surveillance programs.
Mr. Schmidt at one point warned that widespread surveillance of
electronic communication is difficult to maintain because of the
chance it will become public. "It's so easy to do bulk-leaking,
which we're certainly not endorsing," he said.
As for the phone encryption, Apple's and Google's new tools will
only guard data stored only on a phone.
It won't affect call logs maintained by phone carriers and data
backed up in the companies' servers.
"There are many, many ways law enforcement can get what it
needs," Mr. Schmidt said.
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