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Tech Heads Confront White House 'Data Surveyors'

Stocks in this article: GOOG YHOO IBM HPQ

Least Favored in 2013: Featuring the year's shockers from Wall Street to Washington. Read Fed Policy shenanigans; Tech spies; SeaWorld tragedy; Caterpillar-China scandal; Bud Beer scandal; Bill Ackman's Herbalife; LIBOR rigging; Forex Scandal; and check out this video CEO Walk of Shame.

NEW YORK (TheStreet) -- The two-hour meeting Tuesday between President Obama and top tech execs, many of whom had supported his campaign, may yet prove a turning point in the history of technology.

What people like Eric Schmidt of Google (GOOG) were saying, in effect: "Mr. President, you're stealing our act."

Their group, Reform Government Surveillance, raised formal complaints last week, which I commented on here, calling the effort cynical.

Yahoo (YHOO), Google, Zynga, and other cloud-based companies routinely sift the data they collect on customers, building detailed dossiers of our preferences. They do this to sell us stuff, and to decide what page to show in response to a search request.

Records leaked by former National Security Agency contractor Edward Snowden indicate that agency is doing much the same thing. They're collecting everything they can, with call records as well as Internet caches, and sifting it to find potential terrorist threats.

Connecting data to people, and using it, brings us to the heart of social networking, the industry consumer cloud services have created.

What's happening in Obama's home town of Chicago is illustrative. As Governing Magazine reported in October, police there have been using social networking to learn not only who might kill, but who might be killed, and discovered they're the same people.

The controversial result is that many people, many of them juveniles, are routinely being tracked and questioned by police without having any police record. The aim is to prevent murders before they happen, and murders in Chicago this year are down by about one-fifth.

That's not the same thing as "listening to all phone calls" but to the advocates now hammering the Obama administration, it comes down to the same thing. While they're at it, these same advocates are noticing what the tech companies are doing, they're connecting the dots, and they're doing damage to the goodwill that these companies need to operate.

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